Social Spending and Human Development in Selected West African Countries

iheoma, nonso (2012): Social Spending and Human Development in Selected West African Countries.

Abstract

The fundamental focus of economic development is the development of the human person, and over the years, there has been a common consensus among development economists on the efficacy of social services in achieving this objective. But, as is the case in advanced countries, is social spending capable of ensuring human development in developing countries? This study aims at providing answers to this question using Nigeria, Ghana and Senegal as case studies. The study adopts the fixed effect partial adjustment model and regresses the human development index on health and education spending across these countries for a period of 10 years (2000 – 2010) for each country, estimated using the ordinary least square. Results show that while health spending is significant in explaining human development in these countries both in the short and long runs, education spending is not. Therefore, it is recommended that in order to ensure the continued development of the human capital in these countries, increased funding of the health sector is necessary. Furthermore, ensuring adequate utilization of education sector allocation and enhancing the availability and accessibility of education services especially to the urban poor and rural dwellers will address the disconnect between education spending and human development.

• Item Type: MPRA Paper
• Language: English
• Keywords: human development, social spending, health, education
• Subjects: H - Public Economics > H5 - National Government Expenditures and Related Policies > H50 - General; H - Public Economics > H5 - National Government Expenditures and Related Policies

References

Adebiyi, M. (2010), “Public Expenditure and Human Capital in Nigeria: An Autoregressive Model”, Department of Economics, University of Lagos, Nigeria. Pp.1-14.

Amakom, U. (2010), Economic Development Theories, Unpublished Lecture Note, Department of Economics, Nnamdi Azikiwe University, Awka, Nigeria. pp. 1- 12.

Bakare A.S & O. Sanmi (2011) Health Care Expenditure and Economic Growth in Nigeria: An Empirical Study, Journal of Emerging Trends in Economics and Management Sciences, Lagos: Scholarlink Research Institute 2 (2) pp. 83-87. Available at: www.jetems.scholarlinkresearch.org.

Baldacci, E. Gupta, S. Clements, B and Q. Cui (2004), “Social Spending, Human Capital and Growth in Developing Countries: Implications for Achieving the MDGs”, IMF Working Paper, New York, IMF, WP\04\217 pp. 1-40.

Barnett, S and R. Brooks (2010), “China: Does Government Health and Education Spending Boost Consumption”? IMF Working Paper, New York, IMF, WP/10/16, January, pp. 1-14.

Barney, S (2005) “Looking Inside for Competitive Advantage”, Academy of Management Executive 9 (4) pp. 49-61.

Becker, G.S. (1993). Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education. 3rd ed. Chicago: University of Chicago Press.

Birdsall, N. Ross, D. and Sabot, R. (1993) “Underinvestment in Education: How Much Growth Has Pakistan Forgone? The Pakistani Development Review, Islamabad. Pakistani Institute of Development. Vol. 34, pp. 453-499.

Bloom, D, Canning, D and J. Sevilla (2001), “The Effect of Health on Economic Growth: Theory and Evidence”, NBER Working Paper 8587, Cambridge, NBER November. pp. 1-26.

Castro-Leal F. Dayton J. Demery l. and K. Mehra (2000), “Public Spending on Health Care in Africa: Do the Poor Benefit”, Bulletin of the World Health Organization No. 78, Washinghton, WHO. pp. 66-74.

Central Bank of Nigeria (2011) Statistical Bulletin, Abuja, CBN Publications.

Ehrlich, I. (2007) “The Mystery of Human Capital as Engine of Growth or Why the US Became the Economic Superpower in the 20th Century”, NBER Working Paper 12868, Cambridge. NBER, January. pp. 1-43.

Ehrlich, I and K. Murphy (2007), “Why Does Human Capital Need a Journal? Journal of Human Capital, December, pp.27-35.

Granado, J, Gupta, S and A. Hajdenberg (2010), “Is Social Spending Procyclical”? IMF Working Paper WP\10\234, New York, IMF October. pp. 1-23.

Griffin, K. and T. McKinley (1992) “Towards a Human Development Strategy” UNDP Occasional paper 6, New York, UNDP. pp. 1-105.

Gujarati, D.N. and D.C. Porter (2009) Basic Econometrics. 5th Ed. New York, McGraw-Hill.

Gupta, S. Clements, B. and T. Erwin (1998) “Public Spending on Human Development” Finance and Development, New York: IMF. pp.10-13.

Henera, S and G. Pang (2005), “Efficiency of Public Spending in Developing Countries: An Efficiency Frontier Approach”, World Bank Poverty Reduction and Economic Management Network, Policy Research Working Paper No. 3645, Washington D.C. World Bank, June. pp. 1-33.

Hinchliffe, K. (2002) Public Expenditure on Education in Nigeria: Issues, Estimates, and Some Implications, African Region Human Development Working Paper Series, Washington D.C: World Bank .1-44.

Lionel, D. Shiyan C. Rene, B. and M. Kalpana (1995) “The Incidence of Social Spending in Ghana” World Bank Working Paper No.19704, Washington D.C., World Bank pp. 1-63.

Marimuthu, M. Arokiasamy, L and M. Ismail (2009) “Human Capital Development and its Impact on Firm Performance: Evidence from Developmental Economics” The Journal of International Social Research, Malaysia, Uluslararası Sosyal Aratırmalar Dergisi. Vol. 2. No.8. pp. 265-272.

Moja, T. (2000) Nigeria Education Sector Analysis: An Analytical Synthesis of Performance and Main Issues. Washington D.C: World Bank. pp. 1-53.

Omotor, D.G (2004) “An Analysis of Federal Government Expenditure in the Education Sector of Nigeria: Implications for National Development” Journal of Social Sciences, India, Kamla-Raj. 9(2): 105-110.

Salusi, A & V. Prinz, (2009) Health Care in Ghana, a Report by the Austrian Centre for Country of Origin and Asylum Research and Document (ACCORD), Austria: ACCORD. Available at: www.ecoi.net.

Santé, P. (2010) “Expenditure Tracking Survey in Senegal: The Health Sector” Journal of Social Development, Dakar: Center for Social and Economic Research. pp. 1-16.

Sawada, Y. (1997) “Human Capital Investment in Pakistan: Implication of Micro- Evidence from Rural Households” The Pakistani Development Review, Pakistani Institute of Development Economics, Vol. 36 Issue 4, pp.695-712.

Schultz, T.W. (1963) “The Economic Importance of Human Capital in Modernization”. Education Economics, 1(1), 13-19. Cited in Marimuthu, M. Arokiasamy, L and M. Ismail (2009) “Human Capital Development and its Impact on Firm Performance: Evidence from Developmental Economics” The Journal of International Social Research, Malaysia, Uluslararası Sosyal Aratırmalar Dergisi. Vol. 2 No.8 pp.265-272.

Shenggen, F and R. Neetha (2003), “Public Spending in Developing Countries: Trend Determination and Impacts”, International Food Policy Research Institute Discussion Paper No.9, Washington D.C. IFPRI, pp.1-27.

Son, H.H (2011) “Human Capital Development” ADB Economic Working Paper, Metro Manila, ADB publishers, Series No.225, pp. 1-36.

The African Child Policy Forum (2011) The African Report on Child Wellbeing: Budgeting for Children, Country Brief Senegal, and Ethiopia: The African Child Policy Forum. pp. 1- 7.

Thompson, M.N. & L. Casely-Hayford (2008) “Financing and Outcomes of Education in Ghana.” Research Consortium on Educational Outcomes and Poverty (RECOUP) Working Paper No.16. Ghana: RECOUP. pp.1-88.

Todaro, M.P. and S.C. Smith (2009) Economic Development, 10th, ed. England: Pearson Education Limited. UNDP (2002) Deepening Democracy in a Fragmented World, Human Development Report. New York: Oxford University Press.

______ (2005) International Development at a Crossroad: Aid Trade and Security in an Unequal World, Human Development Report, New York: Oxford University Press.

______ (2006) Beyond Scarcity: Power, Poverty and the Global Water Crisis, Human Development Report, New York: Oxford University Press.

______ (2007/2008) Fighting Climate Change: Human Solidarity in a Divided World, Human Development Report, New York: Oxford University Press.

______ (2009) Overcoming Barriers: Human Mobility and Development, Human Development Report, New York: Oxford University Press.

______ (2010) The Real Wealth of Nations, Human Development Report. New York: Oxford University Press,

______ (2011) Sustainability and Equity: A Better Future for All, Human Development Report. New York: Oxford University Press.

Van de Walle, D (1996), “Assessing the Welfare Impact of Public Spending”, World Bank Policy Research Working Paper No. 1670, Washington D.C. World Bank. October, pp. 1-27.

Wetherell, G. (2007) “Human Resource Development for Accelerated Growth in Ghana” Being Proceedings of International Conference on Human Resource Development held in Accra, Ghana. 1- 4.

World Bank (2011) World Development Indicator, Washington D.C.: World Bank. Available at: data.worldbank.org.