Efficient Human Development Index: an alternative measurement of the welfare of the nations

Abstract

Currently being an important source of information in the definition of public policies and investments between nations, not only lies with the HDI depict the current socio-economic situation of the nation, but also consider the efforts involved in pursuing better results. Within this context, this work aims to present how a new component, the efficiency, can generate better indicators and, consequently, new ways of achieving social and economic development. By using the non-parametric method of Data Envelopment Analysis (DEA), and the results refined by the outlier detection, a high inefficiency in spending on education and health is revealed, causing a considerable change in the welfare ranking of the countries, and indicating that more efficient services can indeed generate a great impact in the quest for development.