Practical reasoning in economic affairs: The HD Index as a case study

Abstract

The French philosopher of science Gilles-Gaston Granger (1992) explains that in the domain of Economics we must take into account three aspects of economic rationality if we want to achieve a correct and complete analysis. According to him, these aspects are the epistemic (or theoretical), the technical and the axiological (or practical). Epistemic rationality refers to the logic involved in the description or knowledge of facts; technical rationality refers to the rationale of the adequation between means and ends; and axiological rationality refers to the reasonability and coherence of the ends. In recent times, we have observed a growing conscience about the relevance of the axiological rationality for economics, which had been almost completely forgotten during the last Century. Anthony Atkinson in an article suggestively entitled “Economics as a Moral Science” (2009: 794) claims that economists have never ceased in making welfare statements, whereas not limiting themselves to positive statements. One of the examples he put is the Human Development Index (HDI), constructed and published by the UN Development Program (UNDP) in its Annual Development Report (HDR). The HDI has epistemic, technical and axiological aspects. There is a logical way of knowing and building the Index as well as a better way of achieving the decided ends, and also a (sometimes “under-defined”, “under-argued” or hidden) rationale for defining these ends and their relative weights. The HDI is then an occasion to discuss whether economists, should intervene –and how to do so– in the definition of the ends or if, à la Robbins, they should limit to indicate the best way of seeking the ends decided in other stages.