service delivery in so many developing countries today, nor clarify the link
between expenditure and health outcomes.
Key points
- Education affects growth via its impact on labour through fertility, mortal-
ity and migration. - Education can increase the productivity of labour (by forming human capi-
tal) and so impact growth via TFP. - Education may also have indirect impacts on growth, such as the effect of
public debate and discussion on the functioning of democracy and the qual-
ity of government policy-making, which many argue has a positive impact
on TFP. - Investment may be attracted to countries offering investors a higher stock
of human capital. - Health contributes to human capital formation through increasing school
attendance and on-the-job learning at work,increasing TFP. - Progress in the provision of education and health in developing countries
has narrowed the gap with developed countries in measures of education
and health achievement over the last fifty years. - Despite measurement and data problems, empirical work shows clear
links from both education and health to economic growth and from
economic growth to education and health. This suggests that there can be
a virtuous circle with improvements in growth and these human measures
of development. - Public service delivery (of education and health) remains very poor across
many developing countries. - There are striking market failures in both education and health.
- Education policy needs to focus on choice and competition, decentraliza-
tion and increased accountability of schools to improve their performance. - A range of possible interventions focus on different aspects of the health
problem,and are debated in terms of their comparative impact. Those
discussed in this chapter are nutrition, public health, medical treatment and
vaccination, hospital care and donor-funded schemes.
144 Sources of Growth in the Modern World Economy since 1950