Challenges in Human Development

International Monetary Fund. External Relations Dept.
Published Date:
January 1991
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Elizabeth M. King

Economist, World Bank

In the past century, vast progress has been achieved in social welfare—the ultimate goal of development. This advance has usually taken place hand-in-hand with economic growth, but even where growth lagged, the quality of life improved. Governments have played a leading role—public spending on classrooms and textbooks, safe drinking water and sanitation, nutrition and immunization programs, and family planning clinics have been critical, especially for the world’s poor. But the demands of the future require better targeting, new and more efficient methods of delivery, fewer regressive subsidies, and closer partnership with the private sector in the provision of certain services.

The agenda for human development in the 1990s differs widely from country to country. Even so, most countries face similar challenges.

Slowing population growth. Nearly 95 percent of the growth in the world’s population in the next 25 years will be in developing countries. High fertility rates and poverty together form a vicious circle that threatens the welfare, or even the survival, of their populations, especially mothers and children. Income growth has generally slowed population growth, but family planning programs and a rise in education levels have made this possible even for poorer countries.

Improving health and nutrition. The World Health Organization and UNICEF estimate that 43 percent of about 15 million child deaths each year could be prevented through vaccinations or other low-cost interventions. But, apart from reducing infant mortality rates and increasing life expectancy, two other tasks are urgent: providing nutrition to improve the mental and physical well-being of children and adults, and improving the control and treatment of disease. One lesson is that creative delivery of nutritional initiatives pays off; a second is that there is no single, off-the-shelf solution to designing a national health strategy. Each country must choose the mix of curative and preventive health services, and of public and private delivery that is most cost-effective in its institutional and epidemiological context.

Building technical capacity. Building and strengthening technical capacity—the ability of people to use and modify new and existing technologies—will be crucial in catapulting many countries on the path toward sustained growth. The government could play two roles: expanding better-quality primary and secondary education, and developing incentives to increase the supply of and demand for more specialized technical training.

Reducing poverty. More than one billion people in the developing regions today live in poverty. World Development Report 1990 concluded that this number could be reduced by a two-part strategy of labor-intensive economic growth and efficient social spending, which together expand opportunities for the poor. But these may not be enough. Safety nets may be needed to protect the most vulnerable groups.

The role of the state

Success in development requires a careful balancing of the roles of the government and the private sector across a broad range of policies. The evidence shows that investing in people makes sense not just in human terms but also in hard-headed economic terms. But in this area, more than in any other, except macroeconomic policy, the state must generally take the leading role.

Over the past decade, social programs have come under severe financial pressure during economic adjustment programs. It will often make sense to shelter some social programs from short-term economic pressures for the sake of long-term investments in human development and the quality of life.

Many well-designed and well-targeted programs have worked—and not necessarily with a heavy drain on public resources. Several countries have encouraged community participation and support for social services. Korea’s educational expansion in the 1950s shows that this need not create inequities. In health, countries are experimenting with private insurance schemes as a way to meet the future demands, especially for expensive curative care. Relying for some services on nongovernmental organizations helps to broaden access to adequate education and health care, but public subsidies, if any, should be linked to the quality of services provided.

When economies are badly managed, investments in people may go to waste. For example, countries that grew between 1975 and 1985 have infant mortality rates 25 percent lower than countries that did not grow. Policies that encourage innovation and investment, and that increase the demand for workers who are better educated and better trained, provide the crucial environment for development.

For a fuller discussion of these issues, see “Investing in People,” World Development Report 1991, Chapter 3.

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