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Social Spending, Human Capital, and Growth in Developing Countries

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  • Baldacci, Emanuele
  • Clements, Benedict
  • Gupta, Sanjeev
  • Cui, Qiang
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    Abstract

    Summary Using panel data from 118 developing countries in 1971-2000, this paper explores the channels linking social spending, human capital, and growth and compares the effects of alternative economic policy interventions. With separate modeling for education and health capital, explicit control for governance, and incorporation of nonlinearity, the paper finds that both education and health spending have a positive and significant impact on education and health capital, and thus support higher growth. Also, other policy interventions, such as improving governance and taming inflation, can achieve similar results. Hence, higher spending alone is likely insufficient to achieve the Millennium Development Goals.

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    Bibliographic Info

    Article provided by Elsevier in its journal World Development.

    Volume (Year): 36 (2008)
    Issue (Month): 8 (August)
    Pages: 1317-1341

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    Handle: RePEc:eee:wdevel:v:36:y:2008:i:8:p:1317-1341

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    Web page: http://www.elsevier.com/locate/worlddev

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    References

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    Cited by:
    1. Hecock, R. Douglas & Jepsen, Eric M., 2013. "Should Countries Engage in a Race to the Bottom? The Effect of Social Spending on FDI," World Development, Elsevier, vol. 44(C), pages 156-164.
    2. Tan Kuan Lu, Clifford, 2014. "University Rankings Game and its relation to GDP per capita and GDP growth," MPRA Paper 53933, University Library of Munich, Germany.
    3. Hirokazu Yoshikawa & Pia Rebello Britto & Jan Van Ravens & Liliana A. Ponguta & Soojin S. Oh & Roland Dimaya & Richard C. Seder & UNICEF Innocenti Research Centre, 2013. "Understanding Governance of Early Childhood Development and Education Systems and Services in Low-Income Countries," Innocenti Working Papers inwopa699, UNICEF Innocenti Research Centre.
    4. Benos, Nikos & Zotou, Stefania, 2013. "Education and Economic Growth: A Meta-Regression Analysis," MPRA Paper 46143, University Library of Munich, Germany.
    5. Johansson, Pernilla, 2010. "Debt Relief, Investment and Growth," World Development, Elsevier, vol. 38(9), pages 1204-1216, September.
    6. Suri, Tavneet & Boozer, Michael A. & Ranis, Gustav & Stewart, Frances, 2011. "Paths to Success: The Relationship Between Human Development and Economic Growth," World Development, Elsevier, vol. 39(4), pages 506-522, April.
    7. Tan, Clifford, 2013. "The contribution of university rankings to country's GDP per capita," MPRA Paper 53900, University Library of Munich, Germany.
    8. Bjorvatn, Kjetil & Farzanegan, Mohammad Reza, 2013. "Demographic Transition in Resource Rich Countries: A Blessing or a Curse?," World Development, Elsevier, vol. 45(C), pages 337-351.
    9. Mariana BALAN & Oana Camelia IACOB & Ana-Maria VOLINTIRU & Aurel MARIN, 2013. "Innovative Perspectives Of A Healthy Economy In Europe," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 4(32), pages 13-26, December.
    10. Lee, Jong-Wha & Francisco, Ruth, 2010. "Human Capital Accumulation in Emerging Asia, 1970–2030," ADB Economics Working Paper Series 216, Asian Development Bank.
    11. Jeroen Klomp & Jakob Haan, 2013. "Political Regime and Human Capital: A Cross-Country Analysis," Social Indicators Research, Springer, vol. 111(1), pages 45-73, March.
    12. Hans Pitlik & Margit Schratzenstaller, 2011. "Growth Implications of Structure and Size of Public Sectors," WIFO Working Papers 404, WIFO.
    13. Mazhar MUGHAL & Natalia VECHIU, 2010. "The role of Foreign Direct Investment in higher education in the developing countries (Does FDI promote education?)," Working Papers 2010-2011_10, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Nov 2010.
    14. Furukawa, Mitsuaki & Takahata, Junichiro, 2013. "Is GBS Still a Preferable Aid Modality?," Working Papers 50, JICA Research Institute.
    15. Dridi, Mohamed, 2013. "Corruption and Economic Growth: The Transmission Channels," MPRA Paper 47873, University Library of Munich, Germany.

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