Improving health is not the best way to increase growth.
I’ll look through the linked paper, but I’d be surprised if one paper is enough to convince me of the spirit of this claim (which I take to be not just that health is not the best but not even especially good or worth targeting). The impression I get is that consensus in development economics is that human capital interventions (e.g. education and health) are very well-regarded. For example Using Randomized Controlled Trials to Estimate Long-Run Impacts in Development Economics says:
“In this section, we assess the evidence from the emerging body of literature that exploits RCTs to estimate long-run impacts of development interventions. One pattern that emerges from the handful of existing studies is that human capital interventions appear to be particularly effective at boosting long-run economic outcomes.”
The paper we cited is a comprehensive recent meta-analysis on the topic of health and growth that synthesizes the literature on this topic.
The paper concludes:
“If improving health leads to growth, this would be a reason, beyond the welfare gain from better health itself, that governments might want to make such investments. However, the evidence for such an effect of health on growth is relatively weak. Cross-country empirical analyses that find large effects for this causal channel tend to have serious identification problems. The few studies that use better identification find small or even negative effects. Theoretical and empirical analyses of the individual causal channels by which health should raise growth find positive effects, but again these tend to be fairly small. Putting the different channels together into a simulation model shows that potential growth effects of better health are only modest, and arrive with a significant delay.”
We did however acknowledge that this claim is controversial:
Moreover, and more controversially, we do not believe that health interventions (whether directly funded or implemented by the state) are the best way to increase growth in the poorest countries.[15] Here, we want to start a discussion on what the most effective causes of growth are, given its huge importance.
This is a topic of ongoing debate in the literature—future research could look into this topic more and a starting point could be the citation trail from the study above.
Having looked at the paper now, I definitely have a different take as to how definitive it is. My maximally contrarian take would be that it’s a non-systematic review in which many (most?) of the works reviewed are in favor of an important causal link running from health to income. I do agree that the overall macro-scale evidence is weak (which is distinct from strong evidence of a weak effect), but this is exactly why people like RCTs over national development! Causal inference at a macro scale is hard!
I just read the paper. It’s more a literature review plus data analysis than a classic meta-analysis (i.e., a paper aggregating the results of many different observations into a single statistical pooled estimate).
I interpret “Improving health is not the best way to increase growth” as: growth usually leads to better health (sure!), and that (very plausibly) investment in economic development (on average) tends to be more cost-effective than investing in health, in the long-term.
However, for EAs, I’d first remark that what matters is not so much “what’s the causal direction in the growth-health correlation?” – which is David Weil’s point – but “what prevents the 3rd world from developing—low GDP or poor health?”. The first question would have for scope even current US and Norway. Since growth trajectories are path dependent and affected by many different things, we should distinguish analyses related to current low and high-income countries, and account for the possibility that different countries will find distinct paths to growth (at least if I understand D. Rodrik’s main point). E.x.: the question “why Senegal still has a low GDP per capita and life expectancy” may turn out to be quite unrelated to “why France has increased its HDI in XXth century”. I’d be marveled if health statistics (which, at least for latin America, includes violence) didn’t play a role in the first case; my personal anecdotal evidence is that prospects for life deeply affect one’s plans, so that, e.g., it’s really hard to design savings and insurance systems, with stable interest rates, in countries where people do not expect to reach old age.
Second, I am very wary of certain conclusions/analysis:
- “differences in life expectancy at birth tend to be far smaller than differences in life expectancy at birth” (p. 3 of the file – 626 in the book)… so what? Life expectancy is still significantly different across countries, income levels and regions, otherwise every age pyramid would be similar to all the others, except that in poor countries it’d have a larger base. Second, if you’re using life expectancy as a proxy for health in general, child mortality is relevant because it provides information about other sanitary conditions.
David Weil calculates the return to health using height as a proxy. I will suspend my judgement until further inquiry and maybe look at the raw data, but I suspect of regressional Goodhart.
I’ll look through the linked paper, but I’d be surprised if one paper is enough to convince me of the spirit of this claim (which I take to be not just that health is not the best but not even especially good or worth targeting). The impression I get is that consensus in development economics is that human capital interventions (e.g. education and health) are very well-regarded. For example Using Randomized Controlled Trials to Estimate Long-Run Impacts in Development Economics says:
The paper we cited is a comprehensive recent meta-analysis on the topic of health and growth that synthesizes the literature on this topic.
The paper concludes:
We did however acknowledge that this claim is controversial:
This is a topic of ongoing debate in the literature—future research could look into this topic more and a starting point could be the citation trail from the study above.
Having looked at the paper now, I definitely have a different take as to how definitive it is. My maximally contrarian take would be that it’s a non-systematic review in which many (most?) of the works reviewed are in favor of an important causal link running from health to income. I do agree that the overall macro-scale evidence is weak (which is distinct from strong evidence of a weak effect), but this is exactly why people like RCTs over national development! Causal inference at a macro scale is hard!
(Health and Economic Growth: Reconciling the Micro and Macro Evidence also looks like a good source that I’ll look at.)
I just read the paper. It’s more a literature review plus data analysis than a classic meta-analysis (i.e., a paper aggregating the results of many different observations into a single statistical pooled estimate).
I interpret “Improving health is not the best way to increase growth” as: growth usually leads to better health (sure!), and that (very plausibly) investment in economic development (on average) tends to be more cost-effective than investing in health, in the long-term.
However, for EAs, I’d first remark that what matters is not so much “what’s the causal direction in the growth-health correlation?” – which is David Weil’s point – but “what prevents the 3rd world from developing—low GDP or poor health?”. The first question would have for scope even current US and Norway. Since growth trajectories are path dependent and affected by many different things, we should distinguish analyses related to current low and high-income countries, and account for the possibility that different countries will find distinct paths to growth (at least if I understand D. Rodrik’s main point). E.x.: the question “why Senegal still has a low GDP per capita and life expectancy” may turn out to be quite unrelated to “why France has increased its HDI in XXth century”. I’d be marveled if health statistics (which, at least for latin America, includes violence) didn’t play a role in the first case; my personal anecdotal evidence is that prospects for life deeply affect one’s plans, so that, e.g., it’s really hard to design savings and insurance systems, with stable interest rates, in countries where people do not expect to reach old age.
Second, I am very wary of certain conclusions/analysis:
- “differences in life expectancy at birth tend to be far smaller than differences in life expectancy at birth” (p. 3 of the file – 626 in the book)… so what? Life expectancy is still significantly different across countries, income levels and regions, otherwise every age pyramid would be similar to all the others, except that in poor countries it’d have a larger base. Second, if you’re using life expectancy as a proxy for health in general, child mortality is relevant because it provides information about other sanitary conditions.
David Weil calculates the return to health using height as a proxy. I will suspend my judgement until further inquiry and maybe look at the raw data, but I suspect of regressional Goodhart.