Basic Needs, Government Debt and Economic Growth

摘要

This paper presents an investigation into the simultaneous and multiple inter-linkages between economic growth and basic needs fulfilment using data from 1970 to 2000. We introduce female education and government debt burden into an explicitly endogenous relationship. The results suggest different roles for basic needs variables, and an asymmetric relationship with economic growth. There is strong evidence that literacy, life expectancy and nutrition all make strong contributions to economic growth, but only a strong reverse relationship in the case of nutrition. There is some evidence of a positive impact of growth on life expectancy, but the effect is quite weak. Surprisingly, literacy growth appears to be independent of economic growth, and to depend overwhelmingly on the initial level. It is possible that the strong linkage from growth to nutrition and the weak linkages from growth to health and education are reflections of the nature of these goods; nutrition depends on access to essentially private goods, while health and education are usually at least partially the subject of public provision. General growth in income provides no guarantee of improvements in health and education unless backed by policies which specifically channel resources to these areas.rnThe idea that improvements in basic human needs are significant contributors to growth is strongly supported, the implication of which is that targeted action on these areas is required if there is to be any hope of reducing the gap between rich and poor countries, as well as on debt relief which is found to have a negative impact on economic growth. By contrast, it cannot be assumed that poor countries can win life-changing improvements to human welfare by going for growth alone, without specific attention to health and education in particular.