CUBAN PROFESSIONAL LITERATURE - REVIEW ARTICLE

Human Development
and Equity in Latin America and the Caribbean

Cándido López Pardo, PhD, MPH
Miguel Márquez, MD, MPH
Francisco Rojas Ochoa, MD, PhD, MPH

CONCEPTS

The methodologies and results presented in this paper are constructed on the basis of concepts of human development and equity.

Although the concept of “human development” – basically development for human beings – had been previously considered, this concept gains momentum with the appearance of the first Report on Human Development prepared for the United Nations Development Program (UNDP) in 1990.

Human development is understood as the process by which human opportunities are expanded. In principle, these opportunities can be infinite and change over time; however, at all levels of development, the three most essential are – according to the UNDP[1] -  enjoyment of a long and healthy life, acquisition of knowledge, and access to the resources required for a decent standard of living. According to this paradigm, development is not limited to fulfillment of income or production goals, nor does it consider people as mere beneficiaries of social welfare. Rather, human beings become the engine, and at the same time, the object of development. And thus, attributed to them is the possibility and necessity of active participation in the process of extending their own opportunities in different areas such as income, knowledge, a long life, freedom, individual security, community participation and the enjoyment of fundamental rights.

Without doubt, the concept of human development has positive aspects: it integrates and complements previous understandings where economic growth acquires a relative value in its association with development, and gives priority to social policies. Moreover, it has evolved from the thinking in which economic growth was considered a means, while development an end, to a concept where human development is considered both an end and a means. It is considered an end, due to its relation to economic growth,[2] and a means, because of its contribution to the increase of  human capital to advance material prosperity.[3] However, it must not be forgotten – as Martínez states[4] - that the concept of human development applied to all countries cannot substitute for specific meanings and problems to be solved in countries with different levels of development, given the different connotation development has for countries which have achieved it and those still struggling to do so.

“Equity” – one of the dimensions of human development[5] - is a somewhat more complex concept, as consequently is “inequity.” Perhaps the most widely used and synthetic definition of health inequity - although valid as well for other spheres - is that proposed by Margaret Whitehead, in essence stating that inequity refers to unnecessary and avoidable inequalities that, moreover, are considered unjust. Thus, to describe a situation as inequitable, the cause must be examined and judged as unjust in the context of what is occurring in the rest of society.[6] Therefore, inequalities are measured, and inequities are judged. However, the conceptualization of inequity cannot only be limited to inequalities; there are unjust, unnecessary and avoidable equalities that also should be considered inequities.

Methodologies proposed here are based on two additional concepts, which are “effectiveness” and “efficiency.” We understand by effectiveness, the capacity to achieve objectives and by efficiency, the relation between results and resources.[7]

METHODS

The Human Development Index

Probably the most noteworthy antecedent of the wide range of indices that have appeared in recent years to measure human development globally, or some of its aspects, is the Physical Quality of Life Index proposed by Morris,[8] which combined the indicators of infant mortality, life expectancy at one year and literacy. Presently, the arsenal available to quantify comprehensive human development or some of its dimensions – although it may not be conceivable that human development or specific aspects of human development are measured – comprises several dozen indices.

The “star” index of the Human Development Reports prepared for UNDP to quantify human development is the Human Development Index (HDI) introduced in the first report on human development in 1990,[9] which has been modified in successive annual reports since then. According to the writers of the Reports, the index measures human development comprehensively by considering the dimensions of longevity, knowledge acquired and income. It is considered “a measure of the capacity of people to achieve long and healthy lives, communicate and participate in the activities of the community and have enough resources to attain a reasonable standard of living.”[10]  Each of the dimensions included in the HDI have been measured according to indices based on indicators that have not always been the same each time the index has been calculated.

Various critical reflections on the HDI have centered on its conceptual aspect - such as those by Breilh[11] and by Martínez[12]; its design, like that by Sunkel and Zulueta[13] with respect to the use of life expectancy at birth; as well as its procedures for considering income, critiqued, among others, by Lüchters and Menhkoff,[14] Anand and Sen,[15] the Cuban Center for Research on the World Economy (CIEM),[16] López,[17] and Silva.[18]

Other Indices Proposed

Several authors have proposed alternative synthetic indices to measure human development on a country scale, among them: Boltvinik,[19] Castellanos,[20] del Valle,[21] López,[22] Noorbakhsh,[23] and Lemos and Frías,[24] as well as on a territorial scale within a country.[24,25,26,27] Other researchers[28] recommend diversity of the socioeconomic niche as a measure of development, defining the “socioeconomic niche” as “the function, in its double condition of producer and consumer, carried out by each large group of persons with similar socioeconomic activity and purchasing power.” They mention the Shannon-Wiener and Simpson indices as measures of diversity.

As has been clearly expressed,[29,30] the relative position of one country’s human development in comparison with another’s is not unequivocal, but rather depends on the conceptualization of human development used and the way this human development is measured, definitions not necessarily devoid of the intentions of those applying them.

Human Development and Equity Index
 
López[31] has suggested the Human Development and Equity Index (HDEI) as an indicator of effectiveness in the achievement of human development. Introduced in the Study on Human Development and Equity in Cuba, 1999,[32] the index is made up of 11 indicators associated with three components: achievement in relevant areas of human development, equity of human groups inside the country, and the impact of income on human development (Diagram 1). A new application of this index was made in 23 countries in the region for the purposes of the current analysis of human development in Latin America and the Caribbean (LAC).

Diagram 1: Components, Dimensions and Indicators Included in the Human Development and Equity Index.

The HDEI includes the dimensions considered by the HDI (economic development, educational level, and state of health) and includes other equally relevant dimensions of human development not taken into account in the HDI.

For a particular country and for each indicator, the relative achievement (RA) is obtained using the expression
RA = (Xcountry – min X) / (max X – min X),
if a high value of the indicator is desirable (all those involved, except the student teacher ratio in primary education); or by the relation

RA = (max X – Xcountry) / (max X – min X),
if a low value of the indicator is desirable, where Xcountry is the value of the indicator registered for the country, and min X and max X are the minimum and maximum observed in the group of countries.

The HDEI takes the following form
HDEI = W1C1 + W2C2 + W3C3
where C1 and C2 are the average of the relative achievements for indicators of the first and the second components–indicators (1) through (8) and (9) and (10) respectively; and C3 is the achievement for indicator (11). W1, W2, and W3 are pondered values for each of the components. To establish these weights, it was understood that the first component (associated with the achievement of relevant aspects of human development) in which aspects of equity are, likewise, implicitly considered and to which a higher number of indicators contribute compared to the other two components, should have double the weight of the sum of the remaining two components. Each of these two components, which are related to equity of human groups inside the countries and the effect of income on human development, in turn, have a weight proportional to the number of indicators that are included in them.[33]

Thus, the index is obtained from the expression
HDEI = 2/3 C1 + 2/9 C2 + 1/9 C3

In this way, the HDEI may have values in the interval from 0 to 1; higher when relative human development - associated with equity - is higher, in the universe of countries under consideration.

The use of the indicators (9), (10) and (11) deserves certain explanation. To measure the equity of human groups inside countries, in the Study on Human Development and Equity in Cuba 1999,[34] the indicators Absolute Parity and Pondered Parity were introduced. These indicators quantify the disparity in achieving aspects of human development among defined groups. Absolute Parity measures how many times greater is the achievement in an aspect of human development in a group 1 with respect to a group 2, in this case, the adult literacy rate achieved by women and by men. However, that parity may be good, possibly equal to 100%, and yet the rates for both groups may be relatively low with respect to a better possible value. That is why the Pondered Parity confers on Absolute Parity a weight according to the relative success attained by the country in the aspect taken into consideration, measured by the Coefficient of Success. The different position of a country with respect to HDI and GDI (Gender-related Development Index) values (the first minus the second) shows the positive or negative impact of gender inequality in human development. At the same time, a positive difference in the location of a country with respect to its GDP per capita (PPP US$) and to its GDI, shows the country has achieved a better level of human development, considering the gender difference in human development, than the level obtained by its income.

The  Index of Dissimilarity

The  Index of Dissimilarity measures what percentage, or what absolute number of cases, must be redistributed to achieve the same rate in all socioeconomic groups or any other grouping under observation. The greater the inequality of the particular event among the groups considered, the higher the index value. Although it is used to redistribute cases of a disease, as has been stated,[35] its application is questionable in analyzing inequalities in mortality or morbidity, because there is no practical and ethical sense in redistributing deaths or diseases.

The Lorenz Curve and the Gini Coefficient

The Lorenz Curve permits inequalities to be identified in the distribution of a certain event according to population distribution, and to contrast this with the uniform or equal distribution represented by a diagonal line from the lower left to the upper right corner of the figure. When applied, as will be seen later, the curve represents the accumulated population percentages on the X axis and the accumulated percentages of the chosen variable on the Y axis; the larger the area found between the Lorenz Curve and the line of equality, the greater inequality in distribution. When the studied variable is “positive,” let us say the number of inhabitants per physician, the curve is located under the line of equality. When the variable is “negative,” such as mortality due to a defined cause, the curve is located above the diagonal. The Gini Coefficient value corresponds to twice the area between the Lorenz Curve and the diagonal line. Gini Coefficient values may range from 0 to 1; higher when the inequality is greater. Those interested in studying these aspects more deeply may consult the work of Schneider et al.[35], among others.

The Homogeneity of Achievement Index

The calculation of this index (HAI) permits measurement of the degree of internal homogeneity within each country in the achievement of a defined group of indicators. The values of this index range between 0 and 1; higher, when the homogeneity or balance is greater.

The Relative Efficiency Index

The Relative Efficiency Index (REI) was included by López to quantify efficiency in the achievement of human development as a function of economic resources in LAC countries.[36] In general, there is a results variable Y and a resource variable X.  The procedure for calculating the index is summarized in the following stages:

1.   Obtain the equation for adjustment of the results indicator as a function of the resource indicator.
2.   Calculate the DISTANCE for each unit of analysis - countries, for example - being
DISTANCE = y - ŷ if a high value for the indicator is desirable,
DISTANCE = ŷ - y if a low value for the indicator is desirable,
where y is the observed value for the results indicator and 
ŷ is the value of this indicator expected from the calculated adjustment function.
3.   Calculate the index using the expression
REI = DISTANCE / DISTANCEMAXIMUM POSITIVE
if the DISTANCE is positive; and by
REI = - ( | DISTANCE | / | DISTANCEMAXIMUM NEGATIVE | )
if the DISTANCE is negative.

The REI may adopt values between -1 and 1, the first value indicating the highest negative  relative efficiency (or the highest relative inefficiency) and 1, the highest positive relative efficiency.

RESULTS

The HDEI was calculated for the 23 LAC countries with a population of 500,000 or more[37], excluding those with a small critical mass of information. Table 1 shows the sources and reference years for the indicators used in the index. A single information source from a national institution was never used for any of the countries to avoid biases in the information.

Table 1: Sources and Reference Years of the Indicators Considered for the HDEI

a) Sources:

ECLAC. Statistical Yearbook for Latin America and the Caribbean 2003. [on line] <http://www.eclac.org>  [Viewed: 24/07/04]
FAO. Country information
[on line] <http://www.fao.org/forestry >[Viewed: 26/07/04]
PAHO. Health situation in the Americas; basic indicators 2003. Washington DC: OPS; 2003. (Doc. OPS/AIS/03.01)
UNDP. Informe sobre desarrollo humano 2000.
Madrid: Ediciones Mundi Prensa; 2000.
UNDP. Human Development Report 2004
[on line] <http://www.undp.org> [Viewed: 24/07/04]
WHO. The world health report 2004
[on line] <http://www.who.int/en> [Viewed: 25/07/04]

(b)Legend:  lya-last year available in period.   cy-closest year.

The values of the indicators considered in the index are shown in Table 2.

Table 2: Values of Basic Indicators Considered in the HDEI

GDP:                       GDP per capita (PPP US$)
LITER:                    Adult literacy rate (%)
HALE:                     Healthy life expectancy
WATER:                  % of population with access to safe drinking water
TV:                          Television sets (per 1000 inhabitants)
ST-TEACH:             Student-teacher ratio in primary education
PHYSIC:                  Physicians (per 10,000 inhabitants)
FOREST:                 Annual average % change in forest surface
LIT/WOMEN:          Literacy rate, women (%)
LIT/MEN:                Literacy rate, men (%)

This data reveals the existence of extraordinary inequalities among countries in the region. While some have a GDP per capita (PPP US$) close to or over 10,000 annually, there are others for which this figure reaches only a third of this sum. There are countries where practically all the population is literate; while in others, only 2 out of every 3 persons, or even fewer, can read and write. 

There are countries in which almost all the population has sustainable access to drinking water; in others, not even half the population has access to this basic service. UNICEF considers lack of drinking water and sanitation one of the most important dividing lines between those living under conditions of absolute poverty and the rest of humanity.[38]

Such abysmal differences in key aspects of health determinants implies that relatively close countries differ substantially in their life expectancies. A person born in Haiti, Bolivia or in Guatemala, for example, is expected to live 10 or more years fewer than a person born in Cuba, Chile or Costa Rica.

The  Index of Dissimilarity reveals that to attain equitable distribution, according to the underlying population, 4% of the total of persons with access to drinking water and some 160,000 physicians (about 17%) would have to be redistributed.

Figure 1 shows the distribution of physicians per population in the region. Among other results, it can be observed that 50% of the population has access to only a bit over 10% of the available doctors. On the other hand, not all countries show the same homogeneity in the achievements of the diverse aspects of human development considered. While countries like Uruguay, Cuba and Argentina show a high degree of homogeneity (HAI equal to 1.000, 0.946 and 0.936, respectively), other countries register values of this index close to 0.700. Haiti is the country with largest heterogeneity in attainment of relative achievements of indicators considered (HAI = 0.000).

Figure 1: Lorenz Curve and Gini Coefficient of the Distribution of Physicians per Population - Latin American and Caribbean Countries; c 2000 ARAM – actual figure missing

The HDEI results for the 23 countries studied are presented in Table 3.

Table 3:. HDEI Values - Latin American and Caribbean Countries; c 2002

The five countries with the highest HDEI values are, in decreasing order, Cuba, Uruguay, Argentina, Costa Rica and Chile.

While the five with lowest values are (also in decreasing order) Honduras, Nicaragua, El Salvador, Guatemala and Haiti. Another indication of the region’s evident disparity is that the maximum HDEI (Cuba) is 6 times higher than the minimum one (Haiti).

For all the countries, the resulting HDEI is value is lower than the HDI.[39] This could be indicating, as previously pointed out,[40] that the achievement gap in important aspects of human development, the absence of equity in human groups inside countries and the meager impact of income on human development all affect human development in LAC countries. This result deserves more incisive analysis.

The weight of economic resources –measured by the GDP per capita (PPP US$) – in the indices leads to contrasting results between the HDI and the HDEI. Economic resources have much less weight in the HDEI than in the HDI. While almost 85% of the changes in the HDI can be explained by variations in the GDP per capita (PPP US$), the effect of this indicator on the HDEI is reduced to 57% - that is, one and a half times less. Thus, the HDEI would seem closer to a comprehensive measurement of human development than HDI, isolating – though not ignoring – the effect of economic resources on such development.

At the same time,  as can be observed in Figure 2, strong positive correlation exists between the HDEI and the HAI; that is, the more homogenous a country is in the achievement of partial aspects of human development, the more global human development achieved.

The Relative Efficiency Indices for four results indicators related to human development as a function of GDP per capita (PPP US$) are shown in Table 4 as an indicator of economic resources for the country considered. Only 4 countries – Cuba, Uruguay, Honduras and Venezuela – show positive indices for the 4 indicators; 17 countries have positive indices for some indicators and negative ones for others (which could be indicating an unequal use of their economic resources), and 2 countries –Trinidad & Tobago and Haiti – show negative indices for all 4 indicators.

Table 4: Relative Efficiency Indices for Results Indicators Associated with Human Development as a Function of GDP per capita (PPP US$), Latin America and Caribbean Countries

To evaluate efficiency in the use of economic resources for global human development in each country, the Modified Human Development and Equity Index (MHDEI) was used, that is, the HDEI not considering the transference of economic resources component in human development. Thus, the MHDEI is a function of two components: achievement in important areas of human development (C1) and equity in human groups inside the country (C2), with the condition that the component that contributes more to the index value is the one that discriminates most. Once these calculations are carried out, both components are equally pondered, so the index will have the following expression: MHDEI = ½ C1 + ½ C2.

Figure 3 shows the location of the countries and the adjustment function obtained. Those countries located above the adjustment function have achieved a higher human development than expected from their economic resources; while those located below the adjustment function have a lower human development than would be expected from their economic resources.

Figure 3: Real and Estimated MHDEI as a Function of GDP per capita (PPP US$) Latin American and Caribbean Countries; c 2002

Figure 4 shows the Relative Efficiency Indices in achievement of human development and equity as a function of available economic resources.

Figure 4: Relative Efficiency Index for Human Development and Equity as a Function of GDP per capita (PPP US$) Latin American and Caribbean Countries; c 2002

Among the group of 23 countries considered, 13 show positive efficiency in the achievement of human development and equity as a function of their economic resources. The countries that achieved greater translation of their economic resources into human development and equity among the LAC  countries are Cuba, Paraguay and Uruguay.

According to their GDP per capita (PPP US$) and using the experience of the 23 countries, Cuba should have an MHDEI of 0.552 instead of the 0.714 it does have. Paraguay should have 0.526 instead of 0.676; and Uruguay, 0.612, instead of 0.753. The countries with highest negative efficiency were Guatemala and El Salvador. These countries should have an MDHEI of around 70% and 60% respectively, higher than the ones they show.

To summarize, it can be said that extraordinary inequalities become apparent among LAC countries with respect to achieving essential aspects of human development. In relation to economic resources, there are countries where the GDP per capita (PPP US$) does not even reach one third of others (Bolivia, Haiti, Honduras and Nicaragua with respect to Argentina, Chile, Costa Rica and Trinidad & Tobago, for example). A basic service such as sustainable access to safe drinking water is enjoyed by almost all the population in some countries (for example, Colombia, Costa Rica, Cuba and Uruguay), while in others (such as Haiti and Paraguay), scarcely half the population has access to it.

Distribution of such a fundamental health resource as physicians is so different that 1 out of every 6 physicians in the region would have to be redistributed to achieve an equitable distribution according to the population they serve. Seventy percent of the LAC population has access to only 40% of the existing physicians.

There is an abysmal difference in life expectancy, where a person born in some countries is expected to live a decade or more than one born in practically bordering countries. An example is the difference of more than 20 years between Cuba, Chile or Costa Rica and Haiti; or the difference of over 10 years comparing these same three countries to Bolivia and Guatemala. Inequality in the balance these countries show in attaining few or many of these achievements must be added to these differences in specific achievements. Quantifying human development and equity by a synthetic indicator – the Human Development and Equity Index – reveals a six-fold difference between the country with the worse result (Haiti) and the country with the best performance (Cuba).

At the same time, it is demonstrated that the more homogenous a country is in achieving specific aspects of human development, the greater the global human development it attains. In addition, countries have exhibited various levels of efficiency in translating economic resources into human development (the most efficient - Cuba, Paraguay and Uruguay; the most inefficient -  El Salvador and Guatemala). From the point of view of measurement, the Human Development and Equity Index seems to be closer to a comprehensive measure of human development than the Human Development Index, since it more clearly isolates the effect of economic resources on the index.

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This article is based on a paper of the same title presented at the 25th International Congress of the Latin American Studies Association, Nevada, October, 2004. Reprinted by permission of the authors.

THE AUTHORS

Cándido M. López Pardo, Full Professor, University of Havana, Cuba.
Miguel Márquez, Distinguished Professor, University of Cuenca, Ecuador and Visiting Professor, University of Havana, Cuba.
Francisco Rojas Ochoa, Distinguished Professor, Higher Institute of Medical Sciences, Havana and Consulting Professor, National School of Public Health, Havana.  Contact: clopez@infomed.sld.cu