Influencing factors

Three indicators particularly influence the quality-adjusted human development challenge index: the pupil-teacher ratio, the number of doctors and number of hospital beds per 1,000 individuals, and knowledge use in the economy, often captured by economic diversification and complexity indices.[1] Countries striving to improve these variables generally show the best outcomes on the index. Additional factors that directly or indirectly influence these inputs are the use of technology, decent employment, gender equality and institutional strength, especially government effectiveness.

These relationships should not be taken as unidirectional causalities running from one variable to another. In some cases, greater causality is expected from some indicators to others, such as from having more and better trained doctors to having more years of healthy life. In other cases, there may be bidirectional causality. For example, higher incomes could help generate more decent jobs and introduce more knowledge in the production process and hence induce a more complex economy. But initial conditions and policies conducive to diversification, decent employment and knowledge use in production often result in higher incomes and lower inequalities. These issues are not of much concern to this report since defining the most effective factors for overcoming development challenges rests on considering each country’s specificities.