Divergences and Convergences in Human Development
AbstractI conduct a cross-country analysis of the human development index (HDI) components, income, life expectancy, literacy and gross enrolment ratios, using Gray and Purser’s 1970-2005 quinquennial database for 111 countries. 1) A descriptive analysis uncovers a complex pattern of divergence and convergence for these components’ evolution. Development is not a smooth process but consists of a series of superposed transitions each taking off with increasing divergence and then converging. 2) Absolute divergence/convergence for the HDI components is decomposed using simultaneous growth regressions including a full set of quadratic interactions between the HDI components, and indicators of urbanization, trade, institutions, foreign direct investment and physical geography. These are implemented, first, using three stage least squares, all of the non-exogenous independent variables fully instrumented, and second, as independent regressions with errors clustered by countries, again all non-exogenous variables instrumented. 3) A set of quantile regressions is run for the HDI component levels on the same variables (just the linear terms), again fully instrumented. Urbanization is a leading significant variable for human development indicators in both sets of estimates, stronger than trade, FDI and institutional indicators. These indicators act with ambiguous signs that may result from their distributive impacts, reducing their effectiveness. The results indicate that improving markets will have smaller returns than complementing them with institutions that can coordinate urbanization as well as investment in human capital. Urbanization itself can provide a concrete agenda for development involving all aspects of economic, political and social life as well as human development.
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Bibliographic InfoPaper provided by CIDE, Division de Economia in its series Documentos de Trabajo with number DTE 481.
Length: 57 pages
Date of creation: Feb 2010
Date of revision:
human development; cross-country analysis; urbanization;
Other versions of this item:
- David Mayer-Foulkes, 2010. "Divergences and Convergences in Human Development," Human Development Research Papers (2009 to present) HDRP-2010-20, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
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