Measuring Human Security: The Why and the How

This paper will assess the use of the human security paradigm as a proxy for measuring the risk embodied in the sovereign debt of emerging market countries. Human security is a multidisciplinary concept that has sought to refocus thinking on the status of vulnerable populations toward human-centred rather than military terms. The concept has appealed to academic researchers and policy analysts as an exciting rubric for thinking about development, but it has defied formal quantification. A robust index of human security would have a measurable impact in the global securities markets to which emerging economies are increasingly turning to finance development. This is because investors in sovereign debt require measurements of the danger that a nation will default on its debt payments, known as country risk. Until now, credit ratings such as Egypt’s current B rating were the standard vehicle for summarizing this risk. But default risk stems from the economic disruptions that usually reside in upstream challenges such as civil war or environmental decline. Interestingly, the very same vulnerabilities that credit analysis seeks to uncover would be illuminated by an investigative frame informed by the concept of human security. This paper will argue for a more human-centred collaboration between international credit rating agencies (and thus global financial markets writ large) and developing country bond issuers. The employment of human security as both an instrument of analysis as well as a development target will benefit both issuers and investors, and will draw issuers and markets into a constructive, formal partnership.