Dynamic Links between the Economy and Human Development

This paper empirically confirms the significance of various links in each of two chains over time: from economic growth (EG) to human development (HD), including EG itself, income distribution, the social expenditure ratio and female education; from HD to EG, including HD itself, along with the investment ratio. Our most important conclusion concerns sequencing over time. EG, which is an important input into HD improvement, is itself not sustainable without such improvement, either prior or simultaneous. Therefore, traditional policy advice, which argues that HD improvements must wait until EG expansion makes it affordable, is likely to be in error.