Moral Reflections on Economics

Highlights of Human Development Report 2023/2024


Muhammad Hammad

We enjoy unprecedented wealth, know- how, and technology—unimaginable to our ancestors.

We know which choices offer better opportunities for peace, shared prosperity, and sustainability, better ways to navigate interacting layers of uncertainty and interlinked planetary surprises.

We know what the global challenges are and who will be most affected by them. And we know there will surely be more that we cannot anticipate today.

So why does pursuing the ambitions of the 2030 Agenda for Sustainable Development and the Paris Agreement feel like a half- hearted slog through quicksand? Why in many places does restoring peace, even pauses or ceasefires as hopeful preludes to peace, feel so elusive? Why are we immobilized on digital governance while artificial intelligence races ahead in a data gold rush?

These questions motivate the 2023/2024 Human Development Report.

The global HDI value has rebounded to a projected record high in 2023. All components of the global HDI are projected to exceed their pre-2019 values.

Despite being projected to reach a new high, the global HDI value would still be below trend. The global figure masks disturbing divergence across countries: every Organization for Economic Co- operation and Development country is projected to have recovered, but only about half of the Least Developed Countries are projected to have done so.

After 20 years of steady progress, inequality between countries at the upper and lower ends of the HDI has reversed course, ticking up each year since 2020).

If the global HDI value continues to evolve below the pre-2019 trend, as it has since 2020, losses will be permanent. Based on the 1999–2019 trend, the global HDI value was on track to cross the threshold defining very high human development (a value of 0.800) by 2030—coinciding with the deadline to meet the Sustainable Development Goals.

Now, the world is off track. Indeed, every region’s projected 2023 HDI value falls below its pre-2019 trend. Whatever its future trajectory, the global HDI value will capture—incompletely, if at all—many other important elements, such as the debilitating effects of chronic illness or the spikes in mental health disorders or violence against women, all restricting people’s possibilities for their lives. For rich and poor countries alike some losses will never be recovered.

Whatever the charts and indicators may say about people today, the COVID-19 pandemic took some 15 million lives. We cannot get them back. Nor was the time siphoned off in so many ways—in isolation, in caregiving, in not attending school.

The HDI is an important, if crude, yardstick for human development. Just a few years ago well-being had never been higher, poverty never lower. Yet people around the world were reporting high levels of sadness, stress, and worry. Those self-reported measures have since risen for nearly 3 billion people. And while 9 in 10 people show unwavering support for the ideal of democracy, there has been an increase in those supporting leaders who may undermine it: today, for the first time, more than half the global population supports such leaders.

The uncertainty complex has cast a very long shadow on human development writ large, with recent years marking perhaps an unfortunate and avoidable fork in its path rather than a short-lived setback.

Progress feels harder to grasp, especially when planetary pressures are brought into view; our standard development measures are missing some things. One of those things may be the disempowerment of people—gaps in the human agency—which is taking combined hits from new configurations of global complexity and interdependence, uncertainty, insecurity, and polarization.

People are looking for answers and a way forward. This can be channeled helpfully via shared ambition that brings everyone along (not necessarily on everything) in areas of cooperation that are not zero- sum, enabled by cooperative narratives and institutions built on a bedrock of generalized trust. Over the past 10 years, both very high and high HDI countries have improved their HDI values without increasing planetary pressures, a shift from previous trends of the two increasing together, so there are reasons to hope that this might be possible.

Troublingly, populism has exploded, blowing past last century’s peaks, which roughly corresponded to periods of mismanaged globalization. That is happening alongside, and in many cases exploiting, wicked forms of polarization, such as the winnowing and hardening of narrow identities, a sort of coercion or unfreedom enabled, if not outright celebrated, by an ongoing fetishization of so-called rational self-interest.

People’s ability to determine for themselves what it means to live a good life, including defining and reassessing their responsibilities to other people and the planet, has been crowded out in many ways. Metastases hands-off dogma hides the raiding of the economic and ecological cookie jar. Dog-eat-dog and beggar-thy- neighbor mind-sets harken back to mercantilist eras. And policies and institutions—including those that have mismanaged globalized market dynamics—default to “me” before “we.”

We are at an unfortunate crossroads. Polarization and distrust are on a collision course with an ailing planet. Insecurity and inequalities have a lot to do with it. So does a constellation of disempowering narratives that engender defensive fatalism and catastrophic inertia—all circumscribed and, in some sense fuelled by, dizzying political polarization.

What can we do to help turn things around? Quite a lot.

Build a 21st-century Architecture for Global Public Goods

First, we should build out a 21st-century architecture to deliver the global public goods that we all depend on. It would function as a third track to international cooperation, complementing development assistance focused on poorer countries and humanitarian assistance focused on emergencies. These tracks are not silos. Distinctively, a global public goods architecture would aim for transfers from rich countries to poorer ones that advance goals for every country to benefit. Every country has a chance to have a say, as well as an opportunity to contribute. As such, this third track is intrinsically multilateral.

Global public goods will require additional financing as a complement, rather than substitute for or competitor, to traditional development assistance. The financing can come in many forms. For example, when some portion of an investment in a poorer country generates global benefits, the corresponding financing (or technology transfer) should tend to be concessional, so that alignment is achieved between who benefits (the rest of the world) and who pays (the rest of the world).

The flip side is the case of hazards or shocks that are not of a single country’s making. Automatic triggers can be embedded in bonds or loan agreements, especially state-contingent debt instruments, to help poorer countries cope with crises that they had little part in generating, such as climate change. This would create more predictable conditions in navigating an uncertain world that could mobilize and attract private finance to those countries.

Dial Down Temperatures and Push Back Polarization

Second, we need to dial down the temperature and push back on polarization, which poisons practically everything it touches and impedes international cooperation. Providing global public goods will help. So will correcting misperceptions about other people’s preferences and motivations. All too often people make biased assumptions about other people, including people on the other side of political divides.

Often, people agree with one another more than they think. For example, while 69 percent of people around the world report being willing to sacrifice some of their income to contribute to climate change mitigation, only 43 percent perceive others believing the same (a 26 percentage point misperception gap).

The result is a false social reality of pluralistic ignorance where incorrect beliefs about others hamstring cooperation that, if recognized and corrected, could help build collective action on climate.

Not all polarization can be reduced to misperception, however big a role it plays. That makes it important to create spaces of deliberation to bridge divides.

Citizen assemblies can function in this way, but they are not the only means. Practical schemes to facilitate more deliberative processing of information can help counter the growing danger of people becoming trapped in beliefs that have no basis. In contexts of intergroup conflict, presenting information in a frame that does not provoke anger can be depolarizing. Interventions that rely on qualitative and narrative-based approaches, such as storytelling and vignettes, are particularly effective.

Narrow Agency Gaps

Third, we need to narrow agency gaps— fuelled in part by the divergence between what people believe is possible or probable and what is objectively possible. Agency gaps are also apparent in half of the people worldwide reporting that they have no or limited control over their lives and more than two-thirds perceiving that they have little influence in the decisions of their government.

To help narrow agency gaps, institutions need to become more people-centered, co-owned, and future-oriented.

People-centered is about placing ultimate objectives in terms of human development and human security, recognizing the interdependence of people and the planet.

Co-owned is about the fair distribution of the power to set collective goals, the responsibilities to pursue them, and the resulting outcomes. It stresses the formation of social norms that cultivate the value of collective achievements and cooperative behavior.

Future-oriented is about focusing on what we can shape and create if we work together, enriching the space for deliberation and agreement. In the face of challenges, a future-oriented perspective opens possibilities for hope and creative resolve.

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