Response to Initial Conditions - Linn Groft

Linn Groft

African Poverty & Western Aid: Response to Initial Conditions

7 February 2011

            In “Disease and Development in Historical Perspective”, Acemoglu et al discuss the effects of disease on economic growth, and dispute the argument that health is a first-order determinant of growth. They argue with various data sets that improvements in health have not led to increased rates of growth in many populations. They acknowledge health as a social and humanitarian concern, and that health differences affected whether or not the “liberal” and democratic institutional structures of Western colonists were installed, but not as an important factor for economic growth for today’s societies. These authors too readily dismiss the influence of health on the future of a society.

            Perhaps they are correct that a health population is not a first-order determinant of growth, but certainly it is a necessary prerequisite. To say that health initiatives should not be part of economic growth initiatives is naïve because while a healthy population is not inherently a productive population, an unhealthy population will not produce rapid growth. I know of no unhealthy countries that are wealthy, industrialized countries. Of course, which comes first is a question of importance, but if a country like Kenya has a significant portion of its working-age population dying off, any growth in GDP is likely concentrated in the hands of the few. And, as Sokoloff and Engerman note, the concentrations of power and money affect the institutions that are built and the degree to which those institutions build up the population as a whole or simply further benefit the elites.

            Furthermore, Acemoglu et al acknowledge that only recently have scientists begun to look at how health might be a determinant for wealth, but that it has been long acknowledged (and they offer no dispute to this) that wealth is a determining factor of health. Economically poorer populations are predisposed to have poorer health. Thus, within a given society, those who are less financially set are going to have poorer health and be individually less capable of contributing to GDP and bettering their own lives. Now, perhaps as an aggregate, this does not make a huge difference. And aggregate growth seems to be all that these authors are concerned with. But let us consider, again, equity within a society and the influence of such equity on the types of institutions and the type of growth that will occur within that society. Sachs et al demonstrate to us that if the poor are getting sick and getting poorer because they are less productive, and their family members become less productive because they have to care for them, and the rich are staying healthy and thus capable of continuing to be productive members of society, then we see an increasing gap between the rich and the poor, the educated and the uneducated, the healthy and the sick. The poor can never catch up; little social and economic equity within the country can be achieved. Can we not then conclude that the institutions that continually develop will continue to—and perhaps even increasingly—benefit those elites and not the unhealthy masses? And that unlike the rather democratic, popular development in the US and Canada, these countries will evolve more like the exploited, highly disparate economies in the Caribbean at the very same time.

            Another point is that money and energy—whether domestic budget or foreign aid—that has to be spent on health initiatives is money and energy that is not being invested elsewhere. Investments in schools and public services and industry must take a back seat to immediate health and sanitation needs, otherwise those services and industries are obsolete.

            Finally, my last point is that maybe these authors are actually just flat-out wrong. While, yes, OECD countries made huge strides post-WWII and Latin-American and South- and Southeast-Asian countries continued to lag behind. But what of other factors? First of all, while health advances were made, those health advances were never as available in Latin American and S/SE-Asian countries as in North American and European nations. OECD countries also had the benefits of industrialization and war-time efforts that spurred growth and innovation, plus favorable geography and a long history of strong infrastructure that do account for many of the differences in growth rates.

            I find Acemoglu, Johnson, and Robinson’s conclusions naïve and faulty. While their research is perhaps informative in some respects, they discredit or simply fail to address many important determinants of economic growth.