not economic growth in itself that is crucial but whether higher incomes are
used to expand public health services. We can use these findings to explain
why the US has one of the lowest life expectancies of any developed country.
The reason is that the benefits of that economic growth over recent decades has
been monopolized by the top echelons of the income distribution and not taxed
by the government to provide public services.
An important caveat to this result is that despite the overall close relation
there are many outliers. Sri Lanka in the early 1990s had an income per head
of $500 and a life expectancy of 71 years while Oman with an income of
$6,700 had a life expectancy of only 66 years (Streeten, 1994). The Sri Lankan
achievement owes much to government provision of decent health and educa-
tion and extensive subsidies on basic foods. An attention to social welfare pre-
dates independence but owes much to the granting of universal adult franchise
in 1931. The first Health Unit in Sri Lanka was established in 1926, providing
primary health care and control of infectious diseases. Similar interventions
did not start in some other developing countries for another 50 years. After
independence real public health spending per capita increased rapidly even
though GDP growth rates were low. Ranking countries by GNP per capita and
by HDI in the late 1980s showed that Sri Lanka had the largest difference
(being 45 places higher on the HDI ranking), with China coming a close
second (+44). Countries ranking higher on their GNP ranking included Oman
(–56),UAE (–50),Gabon (–46) and all oil-producing states (Fukuda-Parr and
Kumar, 2003). The existence of outliers illustrates that improved human
welfare can be achieved even at low levels of income, or alternatively that even
decades of economic growth may not enhance human welfare – what we could
call ‘development without growth’.
As noted above there are also numerous examples of countries that have
achieved high rates of economic growth over several decades without this
growth being translated into equivalent improvements in measures of human
development. Ravallion (1996) argues that the presence of such outliers is
interesting but distracts from the more general finding that the poor typically
do share in the benefits of economic growth. To turn our attention back to this
general finding the influential Indian economist Jagdish Bhagwati published a
powerful book in 2013. It was suitably called:Why Growth Matters: How
Economic Growth in India Reduced Poverty and the Lessons for Other
Developing Countries.Where measures of human development remain low it
is Ravallion suggests more often a case of low/no growth than low-quality
growth. Rather than outliers the most important lesson according to Bhagwati
and Ravallion is for researchers to focus on the regularity with which growth
does promote human development.
Ranis et al.(2000) took the question to its final stage and explored the possi-
bility of a two-way relationship between human development and economic
growth. Economic growth provides resources to households and the govern-
ment to invest in human development; more human development (a healthier
and more educated labour force) promotes economic growth. Using data for
Thinking about Growth 41