This document discusses developing a Local Human Development Index (LHDI) for Poland based on the principles of the UN's Human Development Index. It proposes measuring the LHDI at the local administrative unit (LAU1) level to better inform domestic policymaking. The LHDI would include indicators to measure the economic, educational and health dimensions of human development as both outcomes of policies and inputs like funding. Additional contextual measures may also be included. Computation of the LHDI would aim to unveil differences within Poland and link levels of human development to policy decisions and inputs. Subjective well-being indicators could potentially complement the objective LHDI in the future.

1. Measuring socio-economic development
– The Local Human Development Index
Piotr Arak, Project Coordinator,
UNDP Project Office Poland
PhD Candidate, Institute for Social Policy,
University of Warsaw
Manchester, September 6, 2012
MANCEPT Workshop on Well-being and Public Policy

2. Principles guiding the search for HDI:
• To find a measure that goes beyond income while
retaining methodological soundness.
• To limit the number of variables to ensure
simplicity and manageability.
• To construct a composite index rather than an
extensive set of indicators.
• To merge social and economic indicators (ul Haq
2003).
• Since 1990 the HDI has been gradually refined,
but main principles remain unchanged.
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3. About the Polish project
• Together with the Polish Ministry of Regional
Development the UNDP Project Office in Poland is
starting a project on a new operational measure of
socio-economic development, which methodology will
be based on the Human Development Index.
• National level indicators are only useful for international
comparisons. They can indicate the specific problems
and priorities of a country.
• But computation on a local level is important to reveal
the kind of intra-national distribution that is critical for
domestic policy-making (EU Funds and regional
policy).
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4. Local Human Development Index
• Studies in disaggregated HDI have been initiated in a
number of countries (Akder 1994, Ivanov & Peleah 2011).
• Within each country, there are significant disparities, gaps:
among regions, between the sexes, between urban and
rural areas.
• It‟s not about a ranking of municipalities or regions.
• It is about the way each of it has achieved its human
development level (e.g. good economic performance at the
expense of health or good educational opportunities
offsetting delays in other areas).
• An attempt will be also made to make a retrospective
analysis of LHDI, going back 6 years. This longitudinal
approach would make possible not just monitoring trends
over time but also linking the human development
outcomes to major political developments, decisions taken
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5. Goal 1: unveiling the image of Poland
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6. Goal 2: linking policy inputs with
outcomes
• We would be able to say something about the
changes happening after accession to the
European Union – in link with EU funding.
• Looking for a link between inputs (financial
and infrastructural) of public policy and
outcomes in the level of human development.
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7. Possible levels of analysis (1)
Level General characteristics Known data issues in Poland
Income (GDP data) are
NUTS 2 - Voivodeships Large territorial formations, with available
(Województwa) population Administrative units. Education data are available
Health data are available
Income (GDP data) are
NUTS 3 – Subregion Subregional non-administrative units available
(Podregiony) used in Eurostat analyses. Education data are available
Health data are available
Smaller territorial formations, with a GDP not available but
LAU 1 - Districts and
large variation of population (from computation is possible using
city districts (Powiaty i
small districts to large cities as the taxpayers income data
miasta na prawach
capital city of Warsaw). Administrative Education data are available
powiatu)
units. Health data are limited
Limited data availability
LAU 2 - Municipalities Lowest level territorial formations,
HDI computation difficult or
(Gminy) administrative units.
almost impossible
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8. Possible levels of analysis (2)
• An ideal attemt would be to compute the measure the LHDI at the
LAU2 level as it is the closest level of authority to the citizen and the
direct influence to their lives.
• Bearing in mind limited availability of appropriate data, we propose
that in order to built reliable and valid LHDI, the primary unit of
analysis for this study is LAU 1. This choice is further justified by
activities pursued at the district level in Polish administrative system
– including inter alia secondary education, and provision of health
care (more important than at the LAU 2 level).
• Placing our analysis on the level of NUTS 2 wouldn‟t allow for a
thorough examination of a local policy processes. Limited availability
of data at the LAU 2 level impedes reliability of an indicator
constructed at this level.
• The economical dimension is only possible to be computed using
taxpayers income data.
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9. The basic level of anaylisis – LAU1
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10. New approach to regional policy
1. Defining and populating input indicators –
the quantitative estimate of the personal,
financial, physical and other resources (time
is often being disregarded)
2. Defining and populating outcome indicators
– the quantitative estimate of the change in
the immediate area of intervention (improved
access to, use of, better health, education
outcomes)
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11. Potential problems
• Avoid the error of confusing „input' indices from policy
„outcomes'.
• As far as the international HDI treats this factors jointly,
at this point we need to focus on dividing the indicators
in two separate groups.
• The key is to find sufficient measures enabling
computation outcome indicators at the local level, in
order to estimate policy effects in the spatial
dimension.
• Aside from policy outcomes you need also to take into
consideration external factors, which can complement
the dimensions of the HDI.
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12. Methodology
• The original HDI methodology suggests that the
measurement of human development should focus on the
three essential elements of human life: longevity (health),
knowledge (education) and decent living standards
(represented by income levels).
• Because of the differences in the indices used in the LHDI,
we propose to use the computation method prior to the
2011 HDI revival. In general the aim would be to transform
a raw variable, into a unit-free index between 0 and 1
(which allows different indices to be added together).
• Special effort must go into developing a simple quantitative
measure to capture the many aspects of human life with
sufficient data available at the local level (LAU1).
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13. Dimensions and indicators of the
“outcome” Local HDI
Dimensions of
Economical Educational Health
development
Share of children
Average total
enrolled in pre-school Life expectancy
taxpayers income
education (3-5)
Human Development Agricultural income
Indicators Average result of the
based on conversion
middle school exam
hectares Infant mortality
rate
Sold production of Share of people with
industry tertiary education
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14. Dimensions and indicators of the “input”
Local HDI
Dimensions of
Economical Educational Health
development
Budget of the local Student-teacher Average waiting time for
government per capita ratio outpatient specialty care
Percentage of medical
Human emergency trips that
Development Local government exceeded the maximum
Indicators EU funds distribution per expenditures on amount of time specified by
capita education per law
student
Population per primary care
physician
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15. Single Local HDI may be not enough
• Fakuda Parr (2003) and Pinenda (2012) state that from the HDI‟s
inception, it was explicitly recognized that the concept of human
development is larger than what can be measured by the index.
• This creates certain policy challenges, since there may be situations
where human progress may mask deterioration in other key aspects
not covered in the index.
• For example, civic activity, environment pollution, sustainability of
development, social cohesion, labour market conditions and digital
engagement could be worsening at the same time as the HDI
moves upward.
• This means that the UNDP must regularly update its methodologies
and indicators, as well as try out different indices to better capture
certain aspects of human development (Pineda 2012).
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16. Single Local HDI may be not enough
• The welcomed revision of the HDI in 2010 gave new
indicators such as the education index, because the
formerly used literacy indicator is losing meaning, since
many countries have reached the upper limit.
• The HDI fails to capture important aspects of human
development and the focus of the Human Development
Report Office in recent years has been on refining the
measurement of existing indicators, rather than on the
inclusion of new dimensions.
• But in case of Poland we are going to take into account
additional contextual measures, useful in exploring the
concept of human development.
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17. Context dimensions and indicators to
human development
Sustainable
development Poverty and
Digital
Dimension and social Labout market Civic activity
engagement
sustainability of exclusion
development
The share of
Employment (but Share of tax
beneficiaries of Voter turnout in
Percentage of the data are declarations
Indicator social recent local
treated sewage gathered only sent by
assistance in elections
during census) internet
population
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18. Reveiling the whole picture
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19. Main data sources:
• National Statistical Office,
• National Health Service,
• Ministry of Health,
• Ministry of Finance,
• Ministry of Regional Development,
• Ministry of Labour and Social Policy,
• Public Electoral Commission.
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20. What is more needed?
• A framework for measuring subjective well-being
– maybe an internet site gathering information?
• Well-being as an contextual measure?
• Subjective social capital – trust in other people.
• What could be the basis? A study done every 2-
years on a group of 20 thou people (Social
Diagnosis) or a study on Social Cohesion
conducted by the NSO (social trust and well-
being questions) both not representative for the
LAU1 level but computation and correlation can
be done on the NUTS2 level.
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21. The connection with well-being
• HDI falls into the objective category, as it reflects
people‟s objective circumstances, basing on
observable, quantitative statistics.
• Conversely, subjective indicators are based on
the individual‟s perception of his/her status (e.g.
level of happiness).
• The word “happiness” is often used in a general
way. It does help to focus thinking and look for
measures that count what matters in human life,
which is not available in the vast datasets of
statistical offices and governmental agencies.
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22. Happiness and human development
• There is an interest in finding out how happy people are, such
subjective measures will be of little help unless they can be
combined with sufficient other information to build an understanding
of what makes for better lives (Helliwell, Layard, Sachs 2012).
• Both approaches have their strengths and weaknesses, and should
be complementing each other, but incorporation of subjective
measures on the local level remain a considerable challenge.
• Nonetheless, a possible follow-up to this project could be targeted
specifically at the measurement of subjective well-being, since it
captures best how people rate the quality of their lives.
• What could be done is computation of the indicators listed with
representative indicators of social capital and happiness on the
NUTS2, and on the LAU1 level having in mind the quality of data.
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23. Happiness and human development as
a policy goal
• Keeping happiness as a clear policy objective is
important but difficult and risky. Focusing just on
subjective perceptions is not sufficient.
• A robust “happiness and human development index”
should be a combination of status and perception
indicators.
• Designing such indicators is the minor challenge.
• The difficult – and most important – part is changing
policies from a consumption-driven to “meaningful life
driven” pattern. This entails a fundamental shift in
values of the policymakers – something extremely
difficult – but not impossible.
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24. Thank you for your attention!
piotr.arak@undp.org
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