Achieving Enhanced Levels of Human Development Without Waiting on Advances in Economic Development

Abstract

World leaders, policy makers, and scholars are engaged in efforts to improve human development (HD), which, for the United Nations (UN) Development Program, is about allowing people choices in their lives and providing tools with which to make those choices. Success in increasing human development will impact the daily lives of a nation's citizens as well as contribute to success in meeting the Millennium Development Goals (MDGs): eight shared UN goals to improve living conditions of people around the world.

The information currently available to those seeking to enhance human development measures focuses on a macro-level approach that advocates first advancing national economic development. Recent research on meeting the MDGs focuses on micro-level individual or community activities. Entrepreneurial and microfinance activity are two such micro-level activities that have been associated in research with advances in national economic development. Microfinance, particularly microcredit, activities have been associated in research with advances in some human development measures. Similar research concerning how entrepreneurial activity may relate directly to human development is lacking.

This research project was designed to examine the relationships of these individual activities with human development independent of economic development. Two questions guided this study: (a) Does individual activity (either entrepreneurial or microfinance) have a direct effect on human development, separate from any effect through economic development and (b) If so, do certain types of individual activity (either entrepreneurial or microfinance) have a stronger relationship with some human development measures more than others? Due to data challenges, the scope of this research was restricted to a retrospective study examining measures of entrepreneurial activity with measures of human development. A similar exploration involving microfinance activity is planned for the future.

A literature search and content analysis were conducted to determine definitions and measures. Data on nine measures were collected from 44 nations. Analyses indicated that one measure of entrepreneurial activity (own account workers-individuals owning or operating an enterprise, but hiring no employees) does have a statistically significant relationship with one measure of human development (literacy). Guidelines are also offered from lessons learned in navigating the disparate maze of conceptual and measurement issues when researching this territory.

With several years remaining in the UN Millennium Development Challenge and the UN Decade of Literacy, this research may have implications for policy makers and world leaders as they seek ways to improve both economic and human development simultaneously.