Open AccessA MODIFIED HUMAN DEVELOPMENT INDEX, DEMOCRACY AND ECONOMIC GROWTH IN INDONESIA
Author(s) -
Erly Leiwakabessy,
Amaluddin Amaluddin
Publication year - 2020
Publication title -
humanities and social sciences reviews
Language(s) - English
Resource type - Journals
ISSN - 2395-6518
DOI - 10.18510/hssr.2020.8282
Subject(s) - human development index , human development (humanity) , democracy , nexus (standard) , indonesian , index (typography) , economic growth , ranking (information retrieval) , development economics , human development report , composite index , economics , political science , politics , macroeconomics , engineering , composite indicator , computer science , linguistics , philosophy , machine learning , world wide web , law , embedded system
Purpose of the study: Firstly, to construct a modified human development index by incorporating new dimensions (democracy and employment). Secondly, to measure and compare human development progress in Indonesian provinces. Thirdly, to examine the nexus between human development, economic growth, and democracy during the period 2010-2017.
Methodology: Principle Component Analysis (PCA) method is employed to combining components into one index (composite index) which we call MHDI. The panel simultaneous equation model is applied to examine the nexus between human development, economic growth, and democracy.
Main Findings: There were significant ranking differences between MHDI and HDI-UNDP in 24 provinces of 33 Indonesian provinces. The most significant ranking differences were found in several provinces, especially Maluku, West Java, Central Java, East Java, and Central Kalimantan. The study found a strong two-way relationship between human development and economic growth as well as between human development and democracy.
Applications of this study: This study recommends that human development policies supported by rapid economic growth and democratic stability should be one of the development priorities through government spending and support from private investment (the private sector) which focuses on the development of education and health infrastructure throughout the Indonesian province.
Novelty/Originality of this study: This study employs different methods for constructing a human development index by incorporating a new dimension (democracy and employment).