World Bank Aims to Shame With ‘Human Capital’ Ranking

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BALI, Indonesia—The World Bank’s new “human capital” ranking, which scores countries on investments in health and education, was released Thursday morning here and has already drawn plenty of criticism—by design.

The World Bank rated 157 countries on whether their health and education systems would lead to a productive workforce, in an initiative designed to call out countries for not preparing their populations for the future.

“We really do feel that there is no excuse to not invest in your people at this point,” World Bank President Jim Yong Kim said Thursday at the annual meetings of the International Monetary Fund and World Bank Group in Bali. “And moreover, if you find an excuse not to invest in your people, it will be disastrous for you as technology begins to change the nature of work.”

Best and Brightest

The World Bank’s new Human Capital Index ranks countries on their health and education outcomes, highlighting broad disparities across regions.

Middle East and North Africa

Latin America and the Caribbean

Middle East

and North Africa

Latin America

and the Caribbean

Middle East and North Africa

Latin America and the Caribbean

Middle East

and North Africa

Latin America

and the Caribbean

At the top of the ranking of countries are four Asian economies: Singapore, South Korea, Japan and Hong Kong. The U.S. ranks 24th.

The bottom of the World Bank’s index consists entirely of poorer African nations: Chad, South Sudan, Niger, Mali, Liberia, Nigeria, Sierra Leone, Mauritania, Ivory Coast and Mozambique make up the bottom 10.

Some critics say the World Bank is doing little more than humiliating poorer countries for their struggles.

“I think that this initiative has a terrible name and is a terrible approach,” said Eric LeCompte, the director of Jubilee USA, an advocacy organization focused on the causes of poverty. “What is the World Bank thinking with this name and shame approach to human investment?”

The bank is embracing the controversy.

This approach, the World Bank argues, could raise more funding and generate better outcomes than even large aid efforts.

An example cited by Mr. Kim in Bali was the fact that girls receive worse education than boys in many countries. “Let’s say we raise $10 billion. Everyone pats themselves, ‘Oh we’re so generous,’ ” Mr. Kim said. “But $10 billion will not touch the need for financing of girls’ education. We’ve got to get heads of state and ministers of finance to say, “Oh my God, we’re going to get ranked again.”

The World Bank’s strategy is to give finance ministers an incentive to spend more on education and health, even though many of the benefits could take decades to materialize—well beyond any election cycle.

Pakistani Finance Minister Asad Umar suggested that the pressure of an index, especially when a country is lagging, could spur change. Pakistan is ranked 134 out of 157, just behind Afghanistan.

The Human Capital Index ranks countries based on their performance on five questions about children’s health and education.

Singapore has low death rates, the typical student has 13.9 years of schooling and test scores show they learn a lot. The World Bank’s research shows that these measures have a high correlation to per capita GDP and high productivity growth.

The index “shines a spotlight on the right priorities” of health and education, said Nadia Daar, head of Oxfam International’s Washington office. “Governments too often overlook these areas because of short-term politics,” she said.

The 5 Questions

Questions on which the World Bank’s Human Capital Index is based

  • What’s the probability of survival to age 5?

  • What fraction of children under age 5 do not have stunted growth?

  • How many years do students stay in school?

  • How much do they actually learn (as measured by international test scores)?

  • What’s the probability of surviving to adulthood?

Ms. Daar said one shortcoming of the approach, however, is that it doesn’t account for inequality within a country’s population.

The approach has also drawn skepticism for its framing of humans as capital. “Human capital” is a familiar term to economists: the idea that people’s knowledge and ability to work has great economic value. But the term is one that rankles many who work in education and development.

“Framed as human capital, workers are reduced to commodities alone,” said David Edwards, the general secretary of Education International, a global federation of teachers unions. “The bank says poor children who die early can’t contribute to national productivity as workers,” Mr. Edwards said. “Is that a good argument? Is that the way we should be thinking about the multiple challenges?”

Mr. Kim said the framing of the report must be something that gets through to finance ministers and heads of state.

“We’re trying to make this a political issue that everyone will talk about,” he said. “We know, and we’ve already heard, that countries and leaders can find rankings uncomfortable.”

Mr. Kim said the World Bank has to take some responsibility for the lack of investment in people, especially in African countries, because of its long emphasis on infrastructure such as roads, rails and energy.

Some countries that performed poorly on the index, such as India, Nigeria, Ethiopia and Pakistan, are part of the Group of 24, made up of developing countries that coordinate their responses on international issues. The group expressed caution about the potential for “inappropriate use” of the ranking.

It encouraged the World Bank to continue work on the index, including tweaks to the methodology or data that go into the final ranking.

“I’m not saying that I’m totally rejecting the indexes as they are,” said Mangala Samaraweera, Sri Lanka’s minister of finance and chairman of the Group of 24. But he said there is always room to improve so an index “reflects what it intends to reflect in a most credible, accurate way.”

Write to Josh Zumbrun at [email protected] and Saumya Vaishampayan at [email protected]



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