Since its publication the HDI has attracted the public and policy makers’ attention in
developing countries as well as in international organisations.5 Once again the HDI has brought
the importance of social issues to the forefront. However, in a recent United Nations conference
a number of influential advocates of HDI rightly pointed out that we now should be thinking
about the future of HDI.6
The history of the use of socioeconomic indicators and the composite measures of development
based on these indicators has shown that if such measures are not geared to policy making their
effects are limited and at best they can have a limited consequence for the way we consider
them. Ward (1999) notes that “When instituted, the PQLI (physical quality of life index) had
some immediate policy impact on how American Government through USAID allocated its aid
support to developing countries.” (p 3-4). However, this did not last long. The fact that the
existing President of the World Bank, almost half a century after the UN report (in 1954), has to
reiterate what was practically mentioned in the above report is an alarming indication that we
have made little progress in succeeding to include social aspects adequately in the policy
making process.7
Operationalising HDI
At present the most HDR and HDI can do is to convince the decision makers that attaining a
high level of health, education and economic growth is desirable. This has already been
accepted by most policy makers in developing countries. Given the multiplicity of objectives
the question is how do we go about including these in the policy formulation process?
Commenting on the future research on the HDI Streeten (2000) advocates that one area of
concentration for research should be the practical use of the index to policy making in
developing countries. He points out that a way forward with HDI is the operationalisation of its
concept and asks “How can the HDI be used for appraising (ex ante) and evaluating (ex post)
projects and programmes? Can it be incorporated in project analysis? Can it be used for
allocating aid by donors?” (p 29). An index is not only to measure a composite phenomenon but
also it should be operational if it is to remain meaningful. Indeed the UNDP has now entered
the next phase of the HDI. It should concentrate on making the approach more policy relevant
and this may mean some changes to the index. The future of the HDI as seen by the UNDP
depends on how successfully it becomes operational.