A look at Latin America's human development

For many, the Human Development Index (HDI) is a good measure for quality of life across nations. The United Nations Development Program uses the index to rank countries according to their level of 'human development', taking into account variables of income, life expectancy, literacy rates, and education enrollment. A country with high levels of income, high literacy rates, high life expectancy and high levels of education enrollment will accordingly have a high level of human development.

Calculating the HDI for any country is not difficult. The big picture is that you take the average of the three indexes (income, life expectancy and education), which have been standardized and transformed in values (usually) between 0 and 1. The Wikipedia article on the HDI explains in depth how it is done.

I looked for HDI data for 17 Latin American countries in 1980 and in 2007, in order to see how human development in these nations had evolved in these 27 years. The graph below shows the results:


The existence of three clearly defined groups becomes evident. The first one, composed by Chile, Argentina, Uruguay, Costa Rica, Mexico, Panama and Venezuela have high levels of human development. Ecuador, Colombia, Peru and Brazil, the second group, have medium levels of human development. The third group, made up by El Salvador, Bolivia, Honduras, Nicaragua, Guatemala and Paraguay, has low levels of human development.

From this data it seems that human development is "sticky". In 2007, Latin American countries remained in the group where they started out in 1980. There was virtually no intergroup mobility, as there were no spectacular leaps (or disastrous declines) in human development levels across Latin America. The only exception to this is Paraguay, which in 1980 could arguably be classified in the 'medium' group, but that was at the head of the low HDI category in 2007.

About intragroup mobility, that's another story. Look at Chile, for example: Back in 1980, Chile had the lowest HDI of all the countries in the top group. Panama, Mexico, and Venezuela all had higher human development. Neighboring Argentina was way up there, too. Today, however, the tables have turned: Chile now has the highest HDI level of all these countries. Just look at the slope of Chile's line in the graph to take a grasp of how much that country has achieved in the past 27 years.

Another example of intragroup mobility is at the bottom of the graph, between Guatemala and Nicaragua. In 1980, the former had a considerably lower HDI than the latter (0.531 vs. 0.565). As a matter of fact, Guatemala back then had, by far, the lowest HDI of the sample. In 2007 things had changed: although Guatemala's performance still pales compared to the other countries in its group, Nicaragua has joined it at the bottom of the ranking.