Health and Development: an Economic Perspective

Public health specialists often think that economists perceive development solely in terms of increases in income over time, or increases in the consumption of goods and services allowed by the rises in income. This is only partially true. Certainly, economists believe that rising income levels contribute importantly to human development, but economics has long been concerned with many other dimensions of development as well (Adelman and Morris 1967; Hicks and Streeten 1979; Streeten et al. 1981). For example, considerable attention has been paid to questions of income distribution, particularly the extent of poverty, how it affects social welfare, and what can be done to reduce it (Atkinson 1970, 2003; Ravallion 1994; Sen 1974, 1977). In addition, economists recognize the direct and indirect links between health and human development. People value health for its own sake. Health improvements contribute directly to human welfare and development, to the extent that people are even willing to give up substantial parts of their income in order to improve or maintain their health (Bleichrodt and Quiggin 1999; Maiwenn et al. 2005; Viscusi and Evans 1990). That being said, gains in health also offer individuals and society the opportunity to increase income and consumption, thereby also making an indirect contribution to development (Bloom and Canning 2000; Nordhaus 2003). One implication is that improving health can be an important way of helping the poor escape from poverty (Hulme and Shepherd 2003; Sachs and Malaney 2002).