Human Development Rankings Based on the Pareto Dominance: Illustrations Using Cross-country Panel Data 1980-2007
This paper aims (a) to propose two types of human development rankings, a maximal order ranking (MAXOR) and a minimal order ranking (MINOR), and (b) to examine the characteristics of these rankings by using the ranking results derived from the balanced and unbalanced cross-country panel datasets for the period 1980 to 2007. As a means of illustration, I compare these ranking characteristics and results to those of the human development index (HDI), one of the most prevalent human development measurement tools. The MAXOR and MINOR ranking results have a high correlation with the HDI ranking. However, unlike the HDI, the MAXOR and MINOR do not have to undergo aggregation or indexation when their rankings are being generated. Consequently, they successfully eliminate some of the arbitrariness that is implicit in other existing rankings. The MAXOR and MINOR ranking results are comparatively vaguer than those of other typical rankings such as the HDI in that multiple observations are often ranked identically. However, this vagueness also presents the possibility that these rankings will gain wide acceptance. From 1980 to 2007, the number of rank groups and the distributions of the countries of the MAXOR and MINOR were relatively robust to changes in the total number of countries. This means that a rank order for a specific country in the MAXOR or MINOR shows its relative position against all other countries, regardless of the year in which the country is set and the number of countries. In this sense, these rankings are more appropriate for tracing the historical transition of each country compared to other typical rankings.
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