Reassessing the Effect of Economic Growth on Well-being in Less-developed Countries, 1980–2003

Development debates have been greatly influenced by the growth consensus: the conventional wisdom that economic growth should be the primary priority for less-developed countries (LDCs) because it most effectively improves the well-being of the world’s poor. We compare the impact of growth to other independent variables in an unbalanced panel analysis of up to 109 LDCs and 580 observations across six time points (1980, 1985, 1990, 1995, 2000, and 2003). Our dependent variables include caloric consumption, infant survival probability, one-to-five year survival probability, female life expectancy, and male life expectancy. First, we find that gross domestic product (GDP) has significant positive effects on caloric consumption, female life expectancy, and male life expectancy. Second, GDP does not have robust effects on infant and one-to-five survival probabilities. Third, fertility, urbanization, and secondary school enrollment have larger effects than GDP in the majority of models. The more powerful effects of fertility, urbanization, and secondary schooling cannot simply be attributed to an indirect effect of GDP. Fourth, we find that dependency variables do not have robust significant effects. Fifth, over time, GDP has become much less effective at improving caloric consumption and infant and one-to-five survival. We infer that there are serious limitations to concentrating exclusively on economic growth to improve well-being in LDCs.     

Is technology transfer to subsistence farmers doubling nothing?

Editors Note: This commentary touches on an aspect of technology transfer to the Third World that often is neglected: Can the technology recipients afford to use it? Although the authors focus on the economics of shrimp production by subsistence farmers, affordability is one of the major concomitant issues of transfer from developed to developing countries.     

Asian values revisited

  With Asia's economy still booming in the second half of the 1990's “Asian values” were announced by some politicians (Lee Kuan Yew, Mahatir, Ishihara, Mahbubani etc.) and contrasted with “Western values”. Soon a controversial debate within Asia ensued (Kim, Fidel Ramos ea..), into which also the western democracies joined. The “West” however reacted rather defensively to the new assertiveness of some Asian statesmen, inspite of the fact that the authors of this debate put into question the western dominance in global value setting which has been in existence since the French revolution. But has this debate withstood the test of time, the challenges posed by the recession in Asia and by the ever increasing globalization? Hardly. The crisis has destroyed the notion that “Asian values” had been the main cause and guarantor of Asia's exorbitant growth rates. While in the West Christianity forms the essential basics of culture, in Asia there is a multitude of coexisting - and frequently confronting world religions. There is no other continent which in cultural and political terms is so contradictory and potentially conflict ridden like Asia. “Asianism” as a concept was surely also intended as an instrument to integrate multiethnic Asian societies with weak internal cohesion. At the same time it served to neutralize the human rights issue. In the meantime the debate has become quieter and more dispassionate. In the developed West the notion gained acceptance to abandon “Eurocentrism”. At the same time there is recognition that “Asian values” are not exclusive. Also in Europe the family plays a special role. A debate on values is needed for societal integration – also in the “West” which should become more aware of the need to reassert the origins of its own spiritual foundations. Following September 11th the west is well advised to continue the dialogue on values with Asia. Update and expanded version of an article first published in: Au?enpolitik IV/1996, p. 326 “Beginnt das pazifische Jahrhundert?” I would like to thank Julia Prati for the translation of the updated and expanded version of this article