It might seem obvious to readers of the CFD
blog that market-driven economic growth is the best way to tackle
global poverty and improve human health. At the UN, however, there is a
firmly held belief that inequality between people and states is the real barrier to progress, and that a host of government-led interventions are needed to close the gap between rich and poor and meet the floundering Millennium Development Goals.
At the heart of this fixation with inequality is the belief that
economic growth will only come to the poorest regions of the world if
their people are better educated and healthier. What is needed,
therefore, is a massive scale up of state education and health
services, to be funded by buckets more aid.
Besides being completely unsustainable, this sort of approach is likely
to have little impact on outcomes. Such government-run services are
often woefully inefficient and corrupt, and their massive expansion
would also be likely to crowd out the private sector. We know the
private sector is capable of providing more efficient services for the poor
- particularly in education, and even in healthcare.
The only way to meet the Millennium Development Goals is to encourage
private-sector led economic development. This will improve health and
with it labour productivity by allowing people to afford better living
conditions, sanitation and health technologies. One study
shows that if economic growth in lower-income countries had been just
1.5 per cent higher in the 1980s, at least 500,000 infant deaths could
have been prevented.
It is discouraging that the aid industry does not share this
perspective. Its obsession with inequality is likely to lead to towards
ever more redistributive policy recommendations, which will undermine
economic freedom and with it growth.
Isn't it time they tried something that actually works?
This argument is further elaborated in The Real Determinants of Health, published by International Policy Network.