doel Emes and Tony Hahn Fraser Institute Colum nists IF major league baseball had followed the same methodology for choos- ing players for its recent all-star game as the United Nations does in its Human Development Index (HDI), the con- test would resemble a home-run derby more than anything else. And as much as we root for Canada as our home team, there are some flaws in the Hil which make it hard co cheer in good faith. In baseball, hitters are rypi- cally assessed by three major staustical categories: batting average, home runs, and runs batted in. But ifthe UN were in charge they would reduce the batting averages of hitters who were above the league average, giving more weight to home run and RBI hitters. Oddly enough. this is exactly what the UN does when com- paring human development. The HDI is an average of three variables: life expectancy, education, and Gross Domestic product (GDP) per capite. For countries chat have GDP per capita above the global average, the figures are compressed using a complex formula, while those countries below the average see ne adjustment to their figures. Using 1997 data, the UN formula reduces Canada’s GDP per capita from $2 a? to $6,073, 4 reduction Gf 72%. This reduces the ditference berween Canada’s income and the global average level of $5,835 to a mere $238. The United Szates’ GDP of $26,297 is similarly com- pressed to $6,101, reducing the difference in incomes between Canada and ihe U.S. to $28 when in actuality it is $4,938. The UN makes the assumption that once a coun- try has reached the global average level of GDP per capi- ta, additional income above thar level leads to inconse- quential increases in develop- ment. While establishing a cut- off may indeed be necessary to separate developed from devel- oping countries, it makes it difficult to compare developed countries — a comparison that many commentators see as the primary use of the HDI. All countries who have income above the global aver- oe A OE ee eee es es 2 oe BON nw Lube & Filter incluces up to 5 litres of 1Ow30 Quakersiate 1362 Marine Drive 2380-9115 i j ail services ‘ae fully warranty’ 21 5i. Safety check. i Mon-Sat 8:00am-6:00pm, Sun. 9:00amn-5:00pm I 15 minutes - FAST! | 1 Expires Aug. 25/99 § Rosh Hashana - Yom Kippur September 10, 11, 12, 19, 20 1999 : Ticxets available at CONGREGATION HAR:EL member of United Synagogtte of Conservative Judaism 1305 Taylor Way, West Van. Info: Sheila at 925-6488 ext t 225 ¢ or Larry 987-6265 4YOoff First Wine! S20 0f£ Second Wine! SZ0o0ff Third Wine! Cannot ba combined with other offers. Applies to Wine Kits started on-premise before August 31.99 only. ts THIS the Man that Drank all your Xmas wine? BETTER Make Some Move! Bring in this Ad to receive special Park & Tilfo ord 7538) Pal draperies-& blinds Itd. Serving the Lower Mainland for over 27 years (Ask about our Seniors Discount) For Free Estimate call §$22-4975 or 987-2966 Drapery Labour $13.50 per panel lined. Low Low Pxicss Jge experience a reduction, but it ts the rich countries that face the greatest distortion. This allows a country hike Canada to reach the top of the rankings despite having GDP per capita chat is 81% of the U.S., notwithstanding the fet that Canadian lite expectancy and education variables are similar to U.S. figures. Reducing anv income dif? ference among countnes who are above the global average of income obscures meaningful comparison of these countries. The UN, in effect, is penal- izing countries with an above- average level of income, illus- trating their concern with an “excessive preoccupation with gross national Product (GNP} growth and national income accounts.” if the Human Development Indes is recalcu- laced without using this income bias there is a signiti- cant re-ordering of countries. Deiractors of this approach may say that this methodciouy over-emphasizes income at the expense of lite expectancy and literacy. However, if one were to ask the citizens of a country near the world average income, for example, Costa Rica or Poland, if they consid- ered themselves ro reside in as David Neel a Narive Jewettery/ Webbina Rincs” developed a country as Canada, the answer would surely be no. In practical terms, mi of people vote with their feet cach vear by emigrating to high-income countries. Wealth is something that most humans consider desir- able and wish they could attain, and not only for pur- poses of achieving some mate rial state of well-being. Individuals are more easily able co engage in post-sec- ondary education if they live in countries that are affluent. Countries with greater wealth also enjoy benefits te health such as lower rates of infant mortality and lesser incidence of disease. Moreover, many technological advances (for exainple, telephones and com- puters) are enjoved on a 1999 Altima GXE “hod, Minors, © cruise control @ 150 horsepower © dual airbags ® four speaker Am/Fm cassette ecess-@ 4 speed automatic Tened inet baal mort “Geran ease ope he new AST Det or every rode: $3,149. Esgoed ot aro rd debvery changes. Based on 18,000 km yoo, lanes. snore, bearsas ond oxqustions fees f ase cilpces Seo you He © antHockout _ protection © git condifionin © upgraded doth” buckef seats © variable intermittent wipers © 60/40 split fold- down rear seat . illuminated entry re extra. Delors Sunday, August 22. 1999 ~ North Shore News — 7 United Nations stuffs the ballot box greater scale by citizens in those countries. Development should not be based around dubious equations thar statistically reward countries who have nor achieved wealth beyond 3 given level. People within medium- and low-income countries would likely not agree with the UN's assump- tion that wealth beyond the global average is relatively insignificant. Nor should indices of development assume that peo- ple are generally content with a mediocre standard of living. Measuring development is not easy, Examining develop- ment using only three mea- sures while distorting one is even more difficult. Those who blindiy hoid up the HDI as a symbol of Canada’s ° heated front seals © keyless remote entry ‘ © gutomatic climate contro! #190 horsepowe’ V6 supremacy, in spite of the index’s tenuous underpin- nings, are doing themselves a disservice. The HDI, and Canada’s perennial Number | ranking, should therefore be eved with a healthy bit of skepticism. As Canadians we do have much to be proud of, but we should remember when look- ing at the UN's latest ranking that our good fortune is not in spite of our wealth bur because ofit. — Joel Emes is a Research Economist and Tony Hahn is a student tavern at Tin Fraser Tustitute. They are working on the Institute’s forthcoming Human Progress Index that pro- vides an alternative to the United Nations index. Timothy Renshaw is on vacation. © 16” allay wheels “e all power equipment © 4 speed automatic © cruise control © sport suspension © leather steering . wheel rea Tod obi. $14,573. leoses ee OAL case ened, Song pc nde the