How important is growth to improvements in health and education? Not at all, says a new UN paper

The first batch of background papers to this year’s big Human Development Report has just been published. The one that caught my eye is by George Gray Molina and Mark Purser. “Human Development Trends since 1970: A Social Convergence Story” crunches a big dataset of Human Development Indicator (HDI) numbers and comes up with some pretty heretical conclusions. It finds that that the links between economic growth and improvements in health, education and life expectancy are not nearly as clear as people often assume (in fact the correlation between economic growth and changes in the non-income components of human development over their period of study is nearly zero). So there’s more to life (and development) than growth – like state action, for example. Here’s the highlights:

“We consider whether trends in human development are different from trends in economic growth. To answer these questions, we assemble a 111 country data set from 1970 to 2005 that makes HDI changes comparable both within and between countries.”

Findings: “There is evidence of poorer countries catching-up with rich countries, particularly with respect to life-expectancy and literacy. In addition, we find that the income and non-income components of HDI change are uncorrelated, thus undermining the common view that they occur jointly.

Only one country (Zambia) experiences a reversal in its human development level over the 35-year period; 110 countries experience growth and healthadvances. Achievements are faster for the pre- 1990 period, and are faster in Asia and the Middle East throughout the whole period. Progress on HDI achievements tends to be literacy-led, while progress in Asia tends to be life-expectancy-led. Improvements in Latin America and Eastern Europe are mixed. These results contrast with the conventional portrait of development progress, largely inferred from the economic growth literature.

We also contrast the top 10 performers in HDI with the top 10 performers for GDP per capita. The exercise highlights the differences between growth-led and HDI-led development. The most rapid improvements in life expectancy and literacy are not occurring in the fastest growing economies of the world. They are occurring in a subset of lower and middle income countries in Asia, the Middle East and northern Africa.

Three results emerge from the second part of the paper, focusing on determinants of HDI trends. First, we find evidence of convergence of human development over time. Does “income matter” as a driver of human development? We find that income is not a significant predictor of life expectancy… the drivers of improvements in health and education differ from the forces that lead to income growth.

Although correlated, we do not find evidence to suggest that human development trends can be explained by factors associated with economic growth…. social factors seem to be driving the aggregate human development story.”

I must admit, I’m a bit baffled by this, given the big literature that says growth is crucial to poverty reduction, and poverty reduction to improvements in health and education – anyone care to try and explain the discrepancy?

[update: seems like I missed another very important finding from the paper – ‘changes in gender roles –proxied by female literacy and fertility– are the best predictors of accelerations in life expectancy and literacy achievement’ See comments from John Magrath and George Gray Molina]

Other background papers in this batch are:

Human Development Concepts

• Alkire, Sabina, “Human Development: Definitions, Critiques, and Related Concepts

• Neumayer, Eric, “Human Development and Sustainability

HD Data and Trends

• Pineda, José and Francisco Rodríguez, “Curse or Blessing? Natural Resources and Human Development

HD and Governance

• Pritchett, Lant, “Birth Satisfaction Units (BSU): Measuring Cross-National Differences in Human Well-Being

• Jayadev, Arjun, “Global Governance and Human Development: Promoting Democratic Accountability and Institutional Experimentation

• Walton, Michael, “Capitalism, the state, and the underlying drivers of human development

HD in Europe

• Stewart, Kitty, “Human Development in Europe

HD in Africa

• Fosu, Augustin Kwasi and Germano Mwabu, “Human Development in Africa

For  more on the Human Development Report – data bases, blogs etc go here

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Comments

11 Responses to “How important is growth to improvements in health and education? Not at all, says a new UN paper”
  1. John Magrath

    Fascinating. It made me want to know more about what the “social factors” are. From a quick skim of the study, it says that household level decisions on limiting fertility and female schooling are the key factors. Those things lead to or reinforce increased literacy, labour participation, changes in gender roles and enhanced life expectancy. Changes in social attitudes on gender is the bedrock and female health and female education the key outcomes that lead to a virtuous circle.

  2. Does this work include any consideration of who in a country is benefiting most from income growth? Presumably in some cases high growth may have meant the rich getting richer, with less effect on the poor. Since the rich in the country may already have high literacy and life expectancy, there is less scope for increases in these indicators under this scenario. Whatever the reasons for the findings, they seem to suggest the need to look more closely at what is happening within countries, not just between countries.

  3. deb

    really? you dont get it? economic growth the way tis done, creates poverty, doesnt ameliorate it. so of course soical factors will lead to improvemetns in health and ed..(eg people demanding more of their govts to supply same)…have a look at the pacific…we need community organising and mobilising, not more ‘development’. it is soporific.

  4. Phillip

    To look at Stephen’s comment a different way, looking at national income would certainly yield very different results than looking at household income divided into income groups. It would also be interesting to control for countries that experienced recent natural resource booms, like Angola and Mozambique–these would certainly skew the findings if not accounted for.

  5. Friends, well this interesting is it not?

    My question is if our definition of growth as the increase in the economic cake is not wrong as most of the “growth” occurs as a consequence of “economic aid” to be able to misuse the natural resources of less developed countries. Education on its own can not solve this problem either. Pouring money into health and poverty alleviation can not do it either, whatever the definition of poverty alleviation is. We need to find a way of assessing poverty, it is not a value, US$ per day, nor is it a qualitative statement. I am after all my study of poverty of the opinion that poverty can only be measured by the lack of individuals or different groups’ contribution to the community as a whole.

    Poverty alleviation only takes place through the any on the following: transferring traditional skills; knowledge; customs; sweat capital for the betterment of the community; or whatever else one can think of. As long as there are people that think that the government, aid agencies, donors or others must provide what they need, poverty will not change.

    The measurement of poverty is something invented by development agencies to make themselves relevant and to show how much so-called developed countries differ from the less developed countries. “Our less developed brothers do not have two and a half motor cars, they do not have an electric stove, refrigerator or air conditioning in their double storied mansions. They therefore must be poor and if we do not provide it we are not doing anything to alleviate poverty.”

    Let us consider an alternative model of so-called poverty alleviation: supporting entrepreneurship at the base level, whether as a farmer, a provider of a service, or a manufacturer that can provide products to “developed countries” without trade barriers being put up. Sometimes I think that it pays “developed countries” or “newly developed countries” or the “west” or the “east” or the “north” or the “south” to keep countries poor to access their abundance of natural resources for nearly free.

    The consequence is that we will once in a while produce a report that covers our greed but tells the poor that we have been doing something but we are afraid it did not work. “We are going to change our model and this time it will change everything.” For the next ten or twenty years nobody will worry about it. Then all of sudden the same report will be generated and another empty promise made.

    Is it bad econometrics or the wrong emphasis or the wrong model? No, it is uglier than that. It is summarised in one word – GREED.

  6. George Gray Molina

    Dear Duncan,
    Thanks for highlighting our paper.

    We find that while “levels” of income (I) and non-income (NI) components of HDI are correlated, their “rates of change” are not. This suggests that the sequence by which a country reaches a high level of NI is not pre-determined: it may run from I to NI, NI to NI, or I to some other variable to NI, etc.

    We test for a number of possible “sequences” and find that changes in gender roles –proxied by female literacy and fertility– are the best predictors of accelerations in life expectancy and literacy achievement, controlling for levels of income, rule of law geography and trade.

    The focus on “rates of change” versus “levels” of HDI is, of course, itself open to discussion. While levels-analysis compares Sweden 2005 to Bolivia 2005, change-analysis asks how Sweden 1970 became Sweden 2005, and, how Bolivia 1970 might increase its social and economic well-being in the future.

    Duncan: thanks George, the finding on changes in gender roles is fascinating, and very important to NGOs like Oxfam that give priority to gender work. And the focus on rates of change seems exactly right – after all, what development actors, whether local, national or global are all about is trying to accelerate rates of positive change in any given country.

  7. Sgilmore

    I haven’t had time to read the paper, but Ducan mentions that the “The most rapid improvements in life expectancy and literacy are not occurring in the fastest growing economies of the world. They are occurring in a subset of lower and middle income countries in Asia, the Middle East and northern Africa.”

    Wouldn’t we expect this given diminishing return?. Wouldn’t the most rapid improvements come from basic changes in developing countries health / education systems that then allows the economy to grow faster but still leaves it with a set of problems that are harder to solve and less easily solved with cash?

    I realise there are the rare cases like Kerala, I’m talking more generally.

  8. Yeah – the rates v levels thing is interesting.

    There was an old Easterly paper (“Life During Growth”, I think) which found that periods of rapid growth weren’t at the same time periods of rapid welfare improvements.

    Also, some of the Happiness research finds something similar: absolute levels of GDP correlate with levels of happiness (with diminishing returns) but periods of rapid GDP growth tend to be periods of relative ‘unhappiness’.

    I wonder whether there’s some sort of political economy explanation for the rates v levels paradox. i.e. when it occurs in developing countries, rapid growth is often unexpected and largely captured by elites. It’s only during subsequent periods of ‘consolidation’ that countervailing forces spring up in opposition to the new inequality and eventually win a social dividend.

    Anyhow, just thinking out loud – thanks for the link.

  9. also, while I remember, on the Health Convergence literature, the following is interesting:

    Trends in World Inequality in Life Span Since 1970
    Ryan D. Edwards
    NBER Working Paper No. 16088

    June 2010

    ABSTRACT
    Previous research has revealed much global convergence over the past several decades in life expectancy at birth and in infant mortality, which are closely linked. But trends in the variance of length of life,
    and in the variance of length of adult life in particular, are less well understood. I examine life-span inequality in a broad, balanced panel of 180 rich and poor countries observed in 1970 and 2000. Convergence
    in infant mortality has unambiguously reduced world inequality in total length of life starting from
    birth, but world inequality in length of adult life has remained stagnant. Underlying both of these trends is a growing share of total inequality that is attributable to between-country variation. Especially among
    developed countries, the absolute level of between-country inequality has risen over time. The sources of widening inequality in length of life between countries remain unclear, but signs point away from
    trends in income, leaving patterns of knowledge diffusion as a potential candidate.

    Much of the health convergence at least seems to be driven by infant health.

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