Extending my conversations

on social and economic development

This semester, we were introduced to development economics in our coursework. One thing I am definitely taking from this course is that the people of your country, their education and skills, their health and similar social development parameters do have an impact on your countries’ growth levels.

I was looking into it further and came across this one paper that showed a correlation between Human Development Index (HDI) and economic development for Asian countries, and a direct reciprocal relationship between HDI and economic development for Arab countries.

This blog is the product of a discussion I had the other day. In the conversation, this idea was taken forward further more. The idea was to make a model which has developing and developed countries. Selecting parameters like literacy rate and healthcare facilities, especially expenditure done by the state into these. Seeing how much these expenditures impact the GDP of the countries. The aim here would be to understand which type of investment in the human capital reaps more economic benefit for countries that have different levels of development.

One of the hypothesis that came up in the discussion was that a more economically developed country will have better institutions to extract the best out of its human population, especially when it comes to training and skill development.

This was just an idea and I understand there are a lot of steep places here. Take for example how in the Arab countries paper, the authors concluded the following:

“increasing the index of human development indicators leads to an increase in the real gross national product, and an increase in the real gross national product results in an increase in the human development indicators index”

This would put a direct bias in the model, depending on which countries I take. However, I do like the ideas we were discussing and wanted to share it with all of you. What I do not want to suggest here is that certain countries, depending on their development levels should only focus on those social development factors that they seem would give them the most economic development. Afterall, what is being discussed here is what resources the people of your country has ready access to. But this idea of such a model did pique my interest.

If you find any paper on the same, or have any further additions or apprehensions about this idea, do comment below. Afterall, more minds in a conversation is always welcome.