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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

You Won’t Hear Much About the UN Human Development Index This Year



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Why won’t you hear much about it? Here is the top ten:

1. Norway (4,676,305)

2. Australia (21,515,754)

3. New Zealand (4,252,277)

4. United States (310,232,863)

5. Ireland (4,622,917)

6. Liechtenstein (35,002)

7. Netherlands (16,783,092)

8. Canada (33,759,742)

9. Sweden (9,074,055)

10. Germany (82,282,988)

As the political theorist Jacob Levy tweeted (in jest), 

New Human Development Index released. Wasn’t HDI’s whole purpose to have Canada and Sweden outrank US? Fail. http://tinyurl.com/3av4s9

I believe that the staff at the UNDP is genuinely committed to poverty alleviation and not political point-scoring, but Jacob’s remark was funny all the same. 

Four of the countries in the top ten are so-called “settler societies,” in which European settlers displaced, usually violently, a large indigenous population. Only one has a long and tragic history of enslavement and segregation. The list reinforces the increasingly common intuition that small countries often out-perform big countries.

So how is it that the United States performs as well as it does? Some will object the U.S. has a high level of wage dispersion. But remember that more educated societies tend to be more unequal, and that the U.S. achieved high rates of secondary school completion before virtually all other advanced market democracies. Younger cohorts in Europe have caught up and in some cases surpassed younger cohorts in the U.S., which suggests that Europe will face strong upward pressure on pre-tax-and-transfer inequality in the years to come. In a sense, the U.S. lives in the future. 

One could argue that the U.S. out-performs because of our natural resource endowments, but that seems unlikely; Norway and Nigeria are both rich in hydrocarbons, and they’re at opposite ends of the HDI spectrum. It could be that high quality of our public institutions, but of course many states in northern Europe outdo us on that front, as does Singapore. I have my pet theories as to why the U.S. out-performs, but I’ll let you guys think about this one.

(I will say that I’m concerned that progressives draw the wrong lessons from the European experience, in part because they don’t pay adequate attention to the drivers of pre-tax-and-transfer inequality.) 

For a good example of someone who isn’t thinking about inequality as broadly or as clearly as he might, I recommend this column. Regular readers will be able to anticipate my response to the column’s various observations, so I won’t belabor the point. 



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