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The Health and Poverty of Nations: From theory to practice

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Author Info

  • David Bloom
  • David Canning

Abstract

Health is both a direct component of human well-being and a form of human capital that increases an individual's capabilities. We argue that these two views are complementary and that both can be used to justify increased investment in health in developing countries. In particular, we argue that the large effect improved health has on household incomes and economic growth makes it an important tool for poverty reduction. We survey the literature on the link between improvements in health and improved economic growth at the national level and also the link between improvements in health and improved productivity and wages at the household level. The theoretical arguments and related empirical evidence demonstrate a large effect of health improvements on productivity, household incomes, and economic growth. Given the large payoffs to health that exist in developing countries, we assess how health can be improved. We also argue that the income gains that result from health interventions can potentially feed back into better health in a process of cumulative causality, suggesting a fundamentally new rationale for greater spending on health in developing countries. In addition, we contend that, for health sector policies to be successful, there needs to be deep institutional change at the international, national, and local levels that puts greater emphasis on the health sector, and in particular that focuses on the health needs the poor themselves identify as important. The HIV/ AIDS epidemic represents the major challenge for health in many developing countries today. We use this as a test case showing how successful health interventions require not just increased spending, but also a profound commitment to change by all sectors of society.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/1464988032000051487
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Human Development and Capabilities.

Volume (Year): 4 (2003)
Issue (Month): 1 ()
Pages: 47-71

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Handle: RePEc:taf:jhudca:v:4:y:2003:i:1:p:47-71

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Web page: http://www.tandfonline.com/CJHD20

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Related research

Keywords: Health; Health Sector; Poverty; Economic Growth; Poverty; Productivity; Hiv/AIDS;

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Citations

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Cited by:
  1. Yusuf, Shahid & Nabeshima, Kaoru & Wei Ha, 2007. "What makes cities healthy ?," Policy Research Working Paper Series 4107, The World Bank.
  2. Baldacci, Emanuele & Clements, Benedict & Gupta, Sanjeev & Cui, Qiang, 2008. "Social Spending, Human Capital, and Growth in Developing Countries," World Development, Elsevier, vol. 36(8), pages 1317-1341, August.
  3. Desbordes, Rodolphe & Azémar, Céline, 2008. "Public Governance, Health and Foreign Direct Investment in Sub-Saharan Africa," SIRE Discussion Papers 2008-23, Scottish Institute for Research in Economics (SIRE).
  4. Jean-Pierre Lachaud, 2005. "Prévalence du VIH et pauvreté en Afrique : Evidence micro et macro-économétrique appliquée au Burkina Faso," Documents de travail 112, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
  5. Ivan Cipin & Sime Smolic, 2013. "Socio-Economic Determinants of Health in Croatia: Insights from Four Cross-Sectional Surveys," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 15(1), pages 25-60, April.
  6. Michele Capriati, 2011. "Public Expenditure and Human Development in the Italian Regions," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 2, June.
  7. Bloom, David E. & Canning, David & Sevilla, Jaypee, 2004. "The Effect of Health on Economic Growth: A Production Function Approach," World Development, Elsevier, vol. 32(1), pages 1-13, January.
  8. Yusuke Kamiya, 2010. "Determinants of Health in Developing Countries:Cross-Country Evidence," OSIPP Discussion Paper 10E009, Osaka School of International Public Policy, Osaka University.
  9. David E. Bloom & David Canning & Jaypee Sevilla, 2001. "Economic Growth and the Demographic Transition," NBER Working Papers 8685, National Bureau of Economic Research, Inc.
  10. Dao, Minh Quang, 2009. "Health, Economic Development, and Poverty in Developing Countries," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 62(2), pages 163-174.
  11. Derek Headey, 2007. "What Professor Rodrik Means by Policy Reform: Appraising a Post-Washington Paradigm," CEPA Working Papers Series WP052007, School of Economics, University of Queensland, Australia.
  12. John Anyanwu & Andrew E. O. Erhijakpor, 2007. "Working Paper 91 - Health Expenditures and Health Outcomes in Africa," Working Paper Series 226, African Development Bank.
  13. Carl Grekou & Romain Perez, 2014. "Child Mortality in sub-Saharan Africa: Why Public Health Spending Matters," EconomiX Working Papers 2014-28, University of Paris West - Nanterre la Défense, EconomiX.
  14. Judith A. Clarke & Nilanjana Roy & Weichun Chen, 2012. "Health and Wealth: Short Panel Granger Causality Tests for Developing Countries," Econometrics Working Papers 1204, Department of Economics, University of Victoria.
  15. Emanuele Baldacci & Qiang Cui & Benedict J. Clements & Sanjeev Gupta, 2004. "Social Spending, Human Capital, and Growth in Developing Countries," IMF Working Papers 04/217, International Monetary Fund.

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