Advances in Development Reverse Inequality Trends
In recent decades countries have gone through unprecedented growth in human development. In 1980 there were 2 countries with a human development index near to or higher than 0.90, now there are 22. It is a well-established fact that growth in human development is positively related with economic growth. Largely as a result of this correspondence, Ranis posited a positive feedback loop between countries with high economic growth and human development (a ‘virtuous cycle’) and countries with stagnant or negative economic growth and human development (a ‘vicious’ cycle). Using longitudinal statistical analysis we show that there is an ‘old model’ of the relationship between human development and economic growth that supports the existence of these cycles and a ‘new model’ that refutes them. This is good news since the vicious-virtuous cycles imply that the rich get richer and the poor get poorer whereas the ‘new model’ shows a conditional and eventual absolute convergence between rich and poor countries in terms of human development. We show that this change is due to two factors: the rise in middle and high developed countries and the high rates of economic growth and human development among somewhat poor and mid-level countries. Our findings correspond to those published in Nature by Myrskyla, Kohler and Billari (2009) demonstrating that for countries at the high end of the human development index (HDI), between 0.85 and 0. 95, there occurs a reversal of the previously well-established negative, development-fertility relationship. Our research, supportive of Myrskyla et. al's findings, demonstrates a more complex relationship between HDI and economic growth rates than previously thought and that socio-cultural factors independent of economic or human development should be taken into account to construct a fuller model of rates of change in economic and human development.
global inequality, human developmen t, economic growth, conver- gence.