DUBAI, United Arab Emirates — The number of countries working with the World Bank to improve their health, education, and social protection outcomes as part of the flagship human capital index has nearly doubled in the last six months, according to Annette Dixon, vice president for human development at the development finance institution.
Twenty-seven countries were listed as “early adopters” when the index was launched to much fanfare during the institution’s annual meetings in Indonesia last October. But now, 57 countries have signed up to be “human capital countries,” Dixon told Devex during the Global Education & Skills Forum in Dubai, United Arab Emirates, last weekend.
The index ranked 157 countries according to outcomes they achieved on health and education with the intention of incentivizing countries to invest more in their human capital. It is part of a broader human capital project aimed at accelerating progress on human development outcomes.
The index was championed by the bank’s then-president, Jim Kim, but with his sudden resignation earlier this year, the project’s survival could be in question. However, Dixon is confident that Kim’s legacy will live on.
“The agenda has momentum … I really don’t see any impact from the transition that’s going on. Human capital is central to the World Bank’s agenda, and more importantly it’s resonating with the policymakers in [the bank’s client] countries,” she said.
The next index is likely to be published in early 2020 in order to take account of the forthcoming Program for International Student Assessment scores, Dixon said.
Dixon spoke to Devex about the impact the index has had so far and plans for the future.
The conversation below has been edited for clarity and length.
How has the index been received by countries so far?
Right now, we have 57 early adopter countries, so there’s been no slowdown in the momentum in the last six months. These countries span different income levels which is important because this is an agenda which is relevant for all countries.
For poorer countries, they are still building education systems and ensuring access. But for middle-income countries, it’s been useful to look at how well they’re doing on these outcomes and realize that it’s a frontier that’s moving because the world is changing rapidly.
Countries are also confronting the fact that, in some cases, they’re not getting as good outcomes as they had thought they were getting for the amount they’re investing. Even Singapore [which came top of the index] feels that they need to do better.
There are also some aspects of the index itself which are novel and which have provided another view for policymakers … countries can see there’s a direct connection between productivity and growth, and that investing in human development outcomes is actually more important for growth than they might have appreciated. So it’s really sharpened the focus that policymakers have.
What changes has the HCI led to in terms of both government policies and borrowing practices and also in terms of the World Bank’s lending?
We’ve had a lot of engagement, many countries have had cabinet retreats, and Pakistan recently had a human capital summit. We’ve seen some countries prioritizing human capital more in their budgets, and in time we will be able to track more of that.
“We don’t see demand for our lending as a specific goal of the human capital project, what we are really keen to do is to help countries improve the effectiveness and levels of their own spending.”— Annette Dixon, vice president for human capital, World Bank
Even before we launched the index, our education financing increased. Last year, it was more than $4 billion — the highest we’d done in a non-crisis year and the second highest ever. Also, health, education, and social protection lending increased by over 70 percent, but it’s too early to tell what we’ll see this year.
But we don’t see demand for our lending as a specific goal of the human capital project, what we are really keen to do is to help countries improve the effectiveness and levels of their own spending where they need to.
India rejected the index when it came out, citing methodological weaknesses and data gaps. What do you say to their criticism?
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I agree with one of their criticisms about the index. The index is based on outcomes and outcomes are the result of years of policies, and they [India] would like something which would give … a picture of how current policies are being implemented on the ground.
We actually have another survey instrument ... service delivery indicators [for health and education] which look at the quality and access of services on the ground. That’s a useful complement since the human capital index is telling them how they compare across countries and the service delivery indicators give them a picture of what’s actually happening today. A lot of countries are using those and we are scaling them up.
Are you planning to make changes to the index in coming years?
We hope to add at least 10 more countries, which will mostly be small island states. We are also helping countries to disaggregate the index by income level so that it’s useful at the national level. In the larger, federalized countries, we are disaggregating at the subnational level because service delivery is usually a national competence.
One of the main criticisms of the index, which we agree with, is that it stops at [age] 18 at secondary school level …. and doesn’t pick up that what happens postsecondary and in the early years.
At the moment there isn’t data [on this] for a number of countries. We have a big data agenda and are helping countries to measure more, including through our service delivery indicators. Our goal is to eventually add more indicators to the index.
How likely is it that countries can move up the index?
If we can get more current data, then there will be changes. In countries where we have historic data points, we can help countries map the trajectory and speed at which they are progressing and this is really helpful.
If we can extrapolate at the current rate of progress how long it will take them to get to the frontier, as compared to countries going even faster, they can then take a very concrete goal, which is very motivating, and work out what would it take to get there.