"What’s wrong with the World Bank’s Human Capital Index?", by David Edwards

The Human Capital Index is a measurement tool created by the World Bank to influence countries to invest more in health and education. With increased education financing a longstanding key demand of Education International and so crucial to achieve SDG4, one might wonder why I am sceptical about this index? Below I give 3 key reasons why the HCI is problematic and not an appropriate tool to ensure that education is a priority in national budgets.

Tomorrow, the World Bank will launch the Human Capital Index (HCI) at its annual meetings in Bali. This index (part of the Bank’s broader Human Capital Project) measures - or rather, estimates - the amount of “human capital”[1] that a child born today can expect to attain by the end of secondary school, given the risks of poor health and poor education that prevail in the country where he/she was born. Specifically, it includes three components: survival (the probability of survival to age 5), health (the fraction of kids not stunted and the adult survival rate) and school (accounting for both access through the expected years of school, and quality, through test scores).

The creators of the HCI claim that its aim is to spur governments to invest more in people – increasing their budget allocations to health and education and stepping up the interventions made in these sectors. This demonstrates a clear shift in the WB’s development priorities. Speaking about the unacceptable deficiency of domestic financing for education at UNGA last month[2], Jim Kim noted that “the World Bank group over the past decades has been part of the problem” as until recently  they have encouraged governments to prioritise investing in infrastructure such as roads and bridges on account of its more obvious, faster returns (unfortunately he did not admit to the numerous other ways that the Bank has been “part of the problem” over the years, such as by providing conditional loans that required developing countries to limit their education spending and regulatory safeguards). Nevertheless, the Bank’s newfound certainty that focusing on human capital is the clearest path towards ending extreme poverty and achieving shared prosperity puts education financing into the spotlight (alongside health) and as a result the HCI has seen considerable support from civil society in the education sector. However, I remain unconvinced about the tool. At best I see it as an ill-timed distraction from the hard work being done in countries and across regions to ensure and monitor predictable, equitable and sustainable funding within the SDG framework. At worst I see it as a new “Washington Nonsensus” initiative that potentially undermines the global education community’s efforts to achieve quality education for all. Here are three key reasons why.

1. Individuals are reduced to human capital, education is reduced to a means for productivity

My first concern relates to social justice, and the index’s neglect of a rights-based approach to education. The Bank’s advocacy to invest in people through education is built upon an argument that ignores the fact that education is a fundamental human right and a public good and as such governments have a duty to invest in education. Under Article 26 of the Universal Declaration of Human Rights, everyone has a right to education, and with the adoption of the Sustainable Development Goals, governments all over the world have committed to providing inclusive, equitable quality education for all.

Yet, the Bank’s “human capital” discourse understands people not as rights holders, but only in terms of their future economic contribution. Indeed, according to the index’s methodology, the HCI is “measured in units of productivity”, brushing aside longstanding critiques of human capital theory.  This seems a far cry from Amartya Sen’s approach to development as freedom, which aimed to enhance not just human capital but human capabilities (individual’s autonomy to use their skills to achieve the lives they have reason to value). Framed as human capital, workers are reduced to commodities.

Furthermore, framed as a means to make productive workers, education is reduced to an input for economic prosperity. The Bank’s rationale is that countries whose students obtain higher test scores have higher GDPs (though the statistical data showing this long-assumed causal relationship has been called into question). But merely churning out workers for the capitalist economy is not the purpose and value of education as I know it. Education is not just about preparing individuals for the world of work, but for the world at large. It is not just about individuals, but about the collective –education can help us achieve a more just, peaceful and sustainable world. Particularly now, at this moment in time as nationalism, xenophobia and inequality are tearing at democracy and giving rise to authoritarian regimes. More than just a means to an end, education itself also has intrinsic value.

2. Do we really need more education data?

My second concern is about the increasing fragmentation of education data. As the Global Education Monitoring Report (GEM Report) recently pointed out, more education datasets are emerging, but as each has differing assumptions and calculations, this misleads countries and others using the data. The GEM Report reminds us that “global data are not just for show”. The Bank is drumming up a lot of publicity for the HCI, but, with the UNDP already publishing the Human Development Index, is this new index really necessary?

The Bank’s education data supposedly allows for cross-country comparison of tests scores (“harmonising” results from international and regional assessments). Meanwhile, the UNESCO Institute of Statistics (UIS), as the official custodian of SDG4 data, is the organisation that has the mandate to monitor SDG4 and is developing a global reporting scale to monitor student outcomes (target 4.1.1). With input from multiple experts and stakeholders, the UIS is painstakingly trying to find the most methodologically sound (but also feasible) way to do this. Setting aside whether measuring learning globally using the same yardstick is even desirable, it is patently clear that duplicating this effort is a waste of resources.

3. The unintended consequences of global learning metrics

My third concern relates to the potential impact of the HCI. It must be remembered that - just as taking one’s temperature does not itself cure a fever - measurement itself does not improve education. Quality education is achieved when public systems are strengthened through policies based on research, evidence and dialogue with the teaching profession. The HCI is ultimately only a measurement tool, and its impact depends on the action it inspires.

The Bank hopes that the index will inspire (or rather name and shame?) countries into behavioural change. The index is supposed to act as a crystal ball, showing countries who are not focusing enough on human capital the stark economic future of their country due to the expected (lack of) productivity of their future workforce. Countries will be ranked according to the index (a two decimal point number under 1.00) and competition will be encouraged. However, as teachers, we know all too well the unintended consequences that can come with rankings and how they can be distorted reflections of reality.  The HCI’s definition of quality education is based solely on admittedly imperfect test-scores. Cambell’s Law states that "The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor." Given the Bank’s oversized influence in advising and funding one must admit that the HCI has the potential to encourage governments to invest, not in strengthening systems, but in standardised testing, thereby encouraging teaching to the test and a narrowed curriculum. Governments may also base policy decisions on political readings of the rankings, even when the HCI’s calculations are not accurate representations of education quality[3].

Old wine in new bottles?

Summing up, as world leaders line up to congratulate the Bank for their new initiative, I urge you to reconsider. What is the problem the HCI portends to solve? World leaders have already committed to the SDGs and by extension to invest in education and health. If the problem is a lack of data, then please join the ongoing efforts of the UIS and others to collect education data under SDG4. If the problem is messaging, then please reconsider the simplistic human capital arguments, particularly at a time of unprecedented disruption and change. If the problem is financing, then please rethink the conditions attached to your loans, get serious about tax justice, stop pushing privatisation, and start supporting the sustainable long-term financing of public services.



[1]According to the World Bank, “Human capital consists of the knowledge, skills, and health that people accumulate over their lives, enabling them to realize their potential as productive members of society” (p.50 of the draft 2019 World Development Report on the Future of Work.

[2]Kim’s comment was at the High Level meeting on the International Finance Facility for Education (IFFEd), where he gave the full support of the World Bank for this new finance mechanism, which aims to enable middle-income countries to get loans for education from multi-lateral development banks.

[3]The cross-country comparisons of learning outcomes are coarse due to multiple methodological difficulties - for example, in some countries the data is measured infrequently, the test takers do not necessarily accurately reflect the population, and the test scores from tests from basic education do not adequately represent a country’s whole education system. Even the Bank acknowledges that “country scores on the index should be interpreted with caution” (draft WDR 2019, p. 60).


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David Edwards

David Edwards is the General Secretary of Education International.

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