Social Investment, Productivity and Poverty: A Survey

This Discussion Paper has evolved out of the work carried out on the first theme. In recent years, there has been a renewal of interest in academic and policy circles on the problems and policies connected with enhancing human development in poor countries. A number of new theoretical and empirical contributions (such as the new growth theories and the work on flexible production in manufacturing) have emphasized the importance of investments in human capacities as both inputs and outputs of economic development. In addition, high levels of human development are being
increasingly viewed as a necessary ingredient for successful structural adjustment in developing economies. In spite of these developments, there seems to be a lack of clarity in the development literature on the input and output effects of human development and the way it relates to structural
adjustment programmes in developing countries.

This paper attempts to fill this gap by providing a simple, coherent and practical approach to human development. It reviews several diverse strands of theoretical and empirical literature concerned with human development and highlights the nexus of relationships among them. The authors review work on population change, education and health, poverty, productivity, international trade and technological capability and structural adjustment, among other subjects. They go on to focus on the steps involved in formulating a human development strategy, and point out the costs of inaction. Finally, they set out the main elements of best practice human development strategies. The paper thus covers, in a non-technical fashion, a wide range of topics of relevance to many contemporary debates. It should be of interest to academics, development practitioners, NGOs and others interested in human development and adjustment issues.