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

June 25, 2010

     By Duncan Green     

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

June 25, 2010
Duncan Green