Human Development Index and its components. Latest trends in its development

The first Human Development Report introduced a new way of measuring development by combining indicators of life expectancy, educational attainment and income into a composite human development index, the HDI. The breakthrough for the HDI was the creation of a single statistic which was to serve as a frame of reference for both social and economic development. The HDI sets a minimum and a maximum for each dimension, called goalposts, and then shows where each country stands in relation to these goalposts, expressed as a value between 0 and 1.

The education component of the HDI is now measured by mean of years of schooling for adults aged 25 years and expected years of schooling for children of school going age. Mean years of schooling is estimated based on duration of schooling at each level of education (for details see Barro and Lee, 2010). Expected years of schooling estimates are based on enrolment by age at all levels of education and population of official school age for each level of education. The indicators are normalized using a minimum value of zero and maximum values are set to the actual observed maximum values of the indicators from the countries in the time series, that is, 1980–2010. The education index is the geometric of two indices.

The life expectancy at birth component of the HDI is calculated using a minimum value of 20 years and maximum value of 83.2 years. These are the observed maximum value of the indicators from the countries in the time series, 1980–2010. Thus, the longevity component for a country where life expectancy birth is 55 years would be 0.554.

For the wealth component, the goalpost for minimum income is $163 (PPP) and the maximum is $108,211 (PPP), both observed minimum observed during the same time series.

The decent standard of living component is measured by GNI per capita (PPP US$) instead of GDP per capita (PPP US$) The HDI uses the logarithm of income, to reflect the diminishing importance of income with increasing GNI. The scores for the three HDI dimension indices are then aggregated into a composite index using geometric mean

14.Washington Consensus and post-Washington Consensus. Why WC is not more appropriate as a method of economic policy in light of the human development?

The term Washington Consensus most commonly refers to an orientation towards neoliberal policies that from about 1980 - 2008 was influential among mainstream economists, politicians, journalists and global institutions like the International Monetary Fund and World Bank. The term can refer to market-friendly policies that were generally advised and implemented both for advanced and emerging economies. It is sometimes used in a narrower sense to refer to economic reforms that were prescribed just for developing countries, which included advice to reduce government deficits, to deregulate international trade and cross-border investment, and to pursue export-led growth. The term was initially coined in 1989 by John Williamson to describe a set of ten specific economic policy prescriptions that he considered should constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the IMF, World Bank, and the US Treasury Department. In 2008 and 2009, following the outbreak of the financial crisis, a chorus of voices began to proclaim the Washington Consensus had ended. In November 2010 the G20 group of governments agreed on a new Seoul Development Consensus

There were 10 policies:

• Fiscaldiscipline

• A redirection of public expenditure priorities toward fields offering both high economic returns and the potential to improve income distribution, such as primary health care, primary education, and infrastructure

• Tax reform (to lower marginal rates and broaden the tax base)

• Interest rate liberalization

• A competitive exchange rate

• Trade liberalization

• Liberalization of inflows of foreign direct investment

• Privatization

• Deregulation (to abolish barriers to entry and exit)

• Secure property rights

Since then, the phrase “Washington Consensus” has become a lightning rod for dissatisfaction amongst anti-globalization protestors, developing country politicians and officials, trade negotiators, and numerous others. It is often used interchangeably with the phrase “neoliberal policies.”

Some of today’s policy discussion, however, might still be understood by using the term as a reference point. For instance, DaniRodrik argues that there now exists an “Augmented” Washington Consensus, which in addition to the items listed above, adds:

• Corporate governance

• Anti-corruption

• Flexible labor markets

• WTO agreements

• Financial codes and standards

• “Prudent” capital-account opening

• Non-intermediate exchange rate regimes

• Independent central banks/inflation targeting

• Social safety nets

• Targeted povertyreduction

The post-Washington consensus is therefore a combination of things: a third-way type challenge to neoliberalism on the basis of innovative mainstream economic analysis, combined with an attempt to incorporate the fundamental ideas of modernisation theory into the heart of development policy making on the basis of 1990s participatory rhetoric. And in this second sense it is an attempt to revive the largely dormant idea that development is about producing a real transformation through interventionist policies.

15.Where are the main potential of the World’s R&D concentrated? What institutions fund and perform R&D in various groups of countries?

There is usually a great difference between the output (R&D itself) and outcome (publications) and funders of R&D. But still, UK comes 4^th on public R&D funding, but 1^st on all 3 normalized measures of output and outcome. Conversely, Japan is 3^rd on the public-funding measure, but 7^th on all output and outcome indicators. It is also important to mention Germany, France, Italy and Russia as the countries of main potential for R&D. Each of them is good in particular sciences.

These countries are at the top because of high investments into infrastructure, science, education, besides the production of highly trained people is vital. There is also a notion that countries depending on exports or agriculture are exhausted and should invest substantially in human capital.

Mainly industry, academic institutions are performing the R&D. Examples of Institutions funding R&D: Department of Defence, Department of Health and Human Services, National Science Foundation.