An overview and evaluation of composite indices of development

The search for alternative indicators of development has witnessed the development of a variety of composite indices of development. These indices integrate various social, political and economic aspects of development in measurement. This paper presents an overview and evaluation of composite indices of development in terms of certain broad dimensions of measurement. In terms of method and technique, composite indices are generally additive ones with equally weighted components consisting of variables selected in an ad hoc manner. Numerous criticisms have been leveled at these methods employed in composite indexing. Composite indices are mainly quantitative insofar as the indices are all presented in numerical format. Composite indices are subject to subjectivity despite the relative objectivity of the methods employed in composite indexing. Composite indices are of a cardinal nature, but remain ordinal insofar as differences in index values cannot be interpreted meaningfully. The multi-dimensionality of composite indices represents one of their main advantages. Indices represent aggregate measures of a combination of complex development phenomena. The comparative application of composite indices of development over space and time remains problematic. Composite indices generally combine measures of ends and means. In respect of method and technique, composite indexing is relatively complex. Composite indices are relatively flexible, because changes in selection, scaling, weighting and aggregation can be effected readily, albeit at the cost of comparability. Composite indices perform relatively well in terms of cross-national availability, but few indices perform well in terms of inter-temporal availability. On the strength of the systematic positive association between income and popular composite indices such as the HDI, many have claimed that these indices represent no real contribution to the literature on indicators research. Composite indices, furthermore, are often considered to be ideological statements rather than practically functional indicators. Yet, composite indices represent useful supplements to income-based development indicators. These indices remain invaluable in terms of their ability to simplify complex measurement constructs, to focus attention and to catch the eye, thus enhancing their political appeal.