'No link between growth, better life'

'No link between growth, better life'

Rukmini Shrinivasan, TNN, Apr 15, 2010, 04.34am IST


Tags:Development|Women|Growth

Economic growth seems to have little to do with human development. On the other hand, the empowerment of women may have a lot more to do with an entire country's development than previously believed. Those are the conclusions reached by a study done by two economists for the UNDP, conclusions that are sure to reignite the growth versus development debate.

Economists George Gray Molina and Mark Purser analysed data from 1970 to 2005 for 111 countries to reach these conclusions. The as-yet unreleased paper, Human Development Trends Since 1970: A Social Convergence Story is one of several commissioned by UNDP for its 20th anniversary Human Development Report, to be released later this year. The Human Development Index (HDI), inspired by Amartya Sen's capability approach, is recommended by some development thinkers as giving a fuller understanding of a country's development than mere money indicators, like GDP growth rate. It is a composite indicator with an income component (GDP per capita) and a non-income component (life expectancy, school enrollment ratio, literacy) with different weights.

Molina and Purser tracked the changes in the income and non-income components of the HDI separately. They found that changes in the two components are not correlated, thus undermining the common view that economic growth automatically leads to or at least is accompanied by human development.

The evidence shows that massive increases in education and health achieved over past 40 years had little if anything to do with globalization. They had to do with decision by states to expand their educational and health systems, coupled by initiatives of the international community to enable access to vaccines and antibiotics, said Francisco R Rodrmguez, Head of Research Team, Human Development Report Office, UNDP, commenting on Molina and Pursers paper. The increase in human development is actually an example of how state intervention works, he added.

Several poor countries have caught up with much richer countries in the non-income aspects of the HDI. In fact, 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. China and the Republic of Korea are in fact the only two countries which appear both among the top ten income and HDI performers.

The paper found that changes in gender roles (literacy, fertility and labour participation) were a strong driver of human development achievements over time. Molina and Purser concluded that the forces that drive economic growth are not the same as the ones that drive human development. Demographic transitions, urbanization and declining fertility rates have accelerated life-expectancy and literacy achievements over past half-century. We believe the underlying drivers of these changes are linked to individual and household-level decisions concerning fertility and female schooling, the paper said.