Leadership

Inequality, Interactions, And Human Development

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Executive Summary

The Human Development Index, which is multidimensional by construction, is criticized on the ground that it is insensitive to any form of inequality across persons. Inequality in the multidimensional context can take two distinct forms. The first pertains to the spread of the distribution across persons, analogous to unidimensional inequality. The second, in contrast, deals with interactions among dimensions. The second form of inequality is important as dimensional interactions may alter individual-level evaluations as well as overall inequality. Recently proposed indices have incorporated only the first form of inequality, but not the second. It is an important omission.

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