Indices and Indicators in Development

An Unhealthy Obsession with Numbers

Stephen Morse

• Publisher: Routledge
• Year: 2013
• Print ISBN: 9781844070114
• eBook ISBN: 9781136563089
• Edition: 1
• Topic: Économie
• Subtopic: Économie du développement

The use of numbers to condense complex systems into easily digested 'bites' of information is very much in fashion. At one level they are intended to enhance transparency, accountability and local democracy, while at another they provide a means of enhancing performance. However, all indicators suffer from the same basic problem that, ironically, is also their biggest advantage - condensing something highly complex into a few simple numbers. Love them or hate them, there is no denying that people use indicators to make decisions.

Indices and Indicators explores the use of indicators within the field of human development. Part I provides a brief outline of the contested meaning of 'development' and how indices and indicators have been used as means of testing the realization of these development visions in practice in a range of institutional contexts. Part II discusses the limitations of such indices and indicators and illustrates how they are dependent upon the vision of development adopted. The book also suggests how indices and indicators can best be employed and presented.

Given our overwhelming reliance on indices and indicators for measuring progress, directing policy and allocating resources, this book is essential core reading for academics, undergraduate and post-graduate students in social science, economics, geography and development studies as well as development practitioners, policy-makers and donor and international funding agencies.

1 SIMPLIFYING COMPLEXITY: WHY DO WE
NEED INDICATORS?

INTRODUCTION

What does the term ‘development indicators’ mean to you?

• complicated
• technical
• mathematics and numbers
• politicians
• boring.

These are some of the terms that were used by a group of students on one of my courses when asked to summarize what they felt the term ‘development indicators’ signified to them. As can be guessed from the above list, the typical association is with numbers, maths and ‘things which are highly technical; for experts only’. In part, it has to be said, this is true. For example, while there are many technical definitions of an indicator (Gallopin, 1997), a typical description is that they are: ‘an operational representation of an attribute (quality, characteristic, property) of a system’ (Gallopin, 1997). This doesn't sound very user-friendly, and would appear to have all the hallmarks of the above list. In fairness, there are less technical sounding definitions, such as the following referring specifically to ‘social indicators’:

A social indicator represents and measures wherever possible certain aspects of the progress or retrogression of such processes or activities as industrialization, health, welfare and educational services, areas of special concern to society.

Interpreted in this broad sense, ‘social indicators’ as a measurement of the social aspects of life become an integral part of ‘development indicators’ (Kao and Liu, 1984).

Nevertheless, the fact that, for the most part, development indicators are numbers derived from complex, or at least apparently complex, methodologies, can generate sympathy with students, and can be a serious disincentive for attempting to understand how they were created. Consider two more comments from the same group of students:

Let someone else (without a life!) worry about their calculation. I certainly don't want to.

I don't want or need to know the details. All I want to see is the final number and what it means.

Again it is hard not to sympathize with these views. After all, the whole point of generating such indicators is that they are meant to simplify. They exist so that we, the ordinary souls who need such information to ‘do something’, do not have to know or worry about the detail. They are there to make things easier for us – not by accident but by design.

When the students were asked for examples of such indicators, the following emerged:

• Gross Domestic Product (GDP) and Gross National Product (GNP)
• indicators of poverty
• access to and quality of health and education services
• quality of life and well-being
• the Human Development Index (HDI).

The list is not a surprising one. The first, GDP and GNP, are indicators of national economic achievement, and development (as will be seen later) has stubbornly been equated with economic progress. They are often referred to in the popular press, as well as being the foci for discussion (along with unemployment, interest rates, exports etc) by politicians at election times. Indicators of poverty, frequently expressed in terms of monetary income per day, are also a reasonable response to the request for examples. Indeed development is sometimes almost defined as the process by which we reduce or eliminate poverty. Today poverty is seen more broadly than just monetary income, and terms such as ‘social exclusion’ are commonly applied. Included here is access to good quality services such as health and education. Quality of life and well-being are perhaps the least tangible of all in the list, given the subjectivity involved. Quality of life encompasses everything important to us – income, health, education, opportunity, housing, transport, peace, leisure, happiness and so on. You name it. Yet here is the quintessential contradiction with development indicators. The above list begins with seemingly highly technical sounding terms that apparently fulfil the views of the students that indicators are ‘technical’, ‘boring’ and the stuff of people ‘without lives’, but, as we move down the list, they strike at the very heart of what probably all of us would see as vital – a job, our happiness, our health, our children. It's true that indicators are but one window onto these, but they are the window that is increasingly being used by those with the power to influence. Indeed the final item in the above list, the Human Development Index, is an example of a single index that encompasses but a few of these ‘essentials’ – health, education and income.

For example, as individuals we would see the quality of education given to our children through the eyes of our personal experience, but those charged with providing resources increasingly see quality through the window of indicators. Our experience would be partly based on an experience that includes exposure to quantitative (numerical) indicators (pass rates, results achieved in exams, class sizes etc) but also to qualitative (non-numerical) indicators (appearance of classrooms, location of school, how friendly the teachers appear to be etc). All of this information is put together (integrated or aggregated) in our brains without us realizing it is happening. Indeed, indicators are increasingly being seen as a tool within a broader policy of facilitating ‘informed choice’ by a much wider group than just policy makers and managers. As part of this process, indicators are often presented in a ‘league table’ format. We can compare one school against another simply by looking at their relative positions within the table.

Those creating and presenting indicators have great power as they can influence high level policy makers and managers, as well as the consumers of a service (Gill and Hall, 1997). The indicators they select and measure will set the agenda not only as to how a service is implemented but even how it is perceived. Rather than being just a limited topic relevant only for technocrats, there are deep issues of power at play:

Indicators are not necessarily collected or used in a purely ‘objective’, ‘scientific’ manner. Power politics and creative accounting frequently influence these practices as power holders try to look their best (de Greene, 1994).

This book will focus on some of the issues surrounding development indicators and indices (an index is a number gained by combining indicators; Liverman et al, 1988; Quarrie, 1992). At one level, the reader will be provided with examples of such indicators and how they are rationalized and created, but, at another level, it takes this technical narrative and places it into a broader context of power. While at times the discussion may be technical, I would urge the reader to persevere. After all it is the methodologies used to get to the indicators that frame what the indicators are, who they were intended for and how they are intended to be ‘used’. As such, like it or not, the devil can really be in the detail, and we ignore this to our peril! In order to facilitate this digestion, much of the technical material has been placed in boxes within the chapters, and some in an appendix at the end of the book.

OUTLINE OF BOOK STRUCTURE

The structure of the book is as follows.

Chapter 1 will begin by providing some examples of the use of indicators (and the ‘league table’ format of presentation) in our lives. It is impossible to provide examples relevant to all who will read this book, such is the pervasiveness of indicators, so I have had to be selective. Indeed I have selected three examples relevant to my own life: a soccer league table (the English Premier League), an example of a university performance league table (I work at a university in the UK) and the primary school league tables for England (my two children attend a primary school in England).

The remainder of Chapter 1 will briefly summarize the contested meaning and theories of development. It is within this evolution of theory and practice that indicators and indices have been created and used. As the reader will appreciate, it is impossible to do justice to the full range of ideas and debates in development spanning at least half a century; there are many other books that attempt just that. The intention here is to provide only a flavour of the trends and issues so as to set out the space within which people have tried to create and apply development indicators.

Chapters 2 and 3 will look at two commonly used sets of indicators and indices in development; economic performance (Chapter 2) and poverty (Chapter 3). Development is often seen in terms of a progression, such as the improvement in economic performance, but is also sometimes seen in the inverse, as the negation of an absence. In simple terms, development can equate to the reduction or elimination of poverty.

Chapter 4 will explore perhaps the most well known example of a development index, the Human Development Index (HDI). The HDI, first created by the United Nations Development Programme (UNDP) in 1990, attempts to pull together indicators from a range of factors typically regarded as important: education, health and income. It has had its successes and failures, and these will be discussed.

Chapter 5 will present other examples of indicators that are important in development. The ones I have selected are the Environmental Sustainability Index (ESI) and the Corruption Perception Index (CPI). The intention here is not to present the reader with what I think are necessarily the ‘best’ or indeed the ‘only’ such indices, but rather to provide examples which illustrate some of the problems involved. The ESI and CPI are more complex than the HDI and, while this can be seen to have advantages, there are trade-offs and these indices are interesting examples for that very reason.

Chapter 6 will look at the danger of oversimplification by exploring how some workers have tried to use indicators. There are a number of dimensions here, depending in part upon who is defined as the ‘user’. First there is a discussion as to how indicators, more specifically the HDI, have been reported in the popular press. The second part of the chapter will look at how specialists have attempted to use indicators to analyse processes and constraints within development. The issue of cause–effect rises to the fore here. Indices such as the HDI, ESI and even CPI can almost be seen as benign and harmless. It may be the case that they simplify (perhaps oversimplify) reality, but is that necessarily a problem? Does it matter? The discussion in Chapter 6 will hopefully alert the reader to the fact that it does matter – it can matter a great deal! The third part of the chapter will explore how development indices are used in terms of setting and implementing policy.

In time honoured fashion, Chapter 7 will summarize the main messages of the book and draw out some conclusions.

INDICATORS AND LEAGUE TABLES

We are all familiar with league tables, particularly in competitive sports. An example is provided in Table 1.1 for English soccer clubs. This is the final placement of the 20 clubs that comprise the English Premier League at the end of the 2002/2003 season. Each team plays the others twice (once at home and once away), and points are allocated depending upon whether a team wins (3 points), draws (1 point each) or loses (0 points). Clubs with the same number of points are ranked by goal difference (between the number of goals scored and the number conceded). Clearly the points (and goal difference) are indicators (or measures) of how well a te...

Table of contents

• Front Cover
• Halftitle
• Title Page
• Copyright
• Contents
• List of Figures, Tables and Boxes
• List of Acronyms and Abbreviations
• Acknowledgements
• Preface
• 1 Simplifying Complexity: Why Do We Need Indicators?
• 2 Development Indicators: Economics
• 3 Development Indicators: Poverty
• 4 Integrating Development Indicators
• 5 The Precarious Art of Simplifying Complexity
• 6 Taking Care with Development Indicators
• 7 A Comparative Indicatorology
• Notes
• References
• Appendix 1 Factor analysis: a brief introduction
• Index