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Social capital, culture and theories of development
Nigeria security tracker Accessed February 29, , [ Retrieved from ]. Djankov, S. The regulation of entry, Quarterly Journal of Economics , 1 , Quarterly Journal of Economics , 2 , Glaeser, E. Do institutions cause growth? Goldsmith, A. Democracy, property rights and economic growth, Journal of Development Studies , 32 2 , Grossman, G.
Innovation and Growth in the Global Economy. MIT Press, Cambridge. Halvorsen, K. Kapur, D. Kaufmann, D. Governance matters. Mastruzzi Knack, S. Institutions and economic performance: Cross-country test using alternative institutional measures, Economics and Politics, 7 3 , Koopmans, T. On the Concept of Optimal Economic Growth. In: The economic Approach to Development Planning. North-Holland, Amsterdam. Lucas, R.
SOCIAL CAPITAL AND ECONOMIC DEVELOPMENT
On the mechanics of economic development, Journal of Monetary Economics, 22 1 , Malhotra, Y. Measuring knowledge assets of a nation; Knowledge systems for development. Martin, L. If better nutrition is defined by improved physical labour productivity alone, there will be a parallel upward shift of the growth path - even if the economy grew faster in the short run, the long-run growth rate would remain unchanged.
This is consistent with an exogenous growth model. However, analogous with the concept of endogenous models, is the view that a labour force with better nutrition can learn faster. If this is true, the diminishing returns that are identified under a narrow definition of capital may disappear. This would produce a growth effect on the balanced path and, as a result, the long-run economic growth rate would increase.
This is discussed in a Lucas model style in the section Theory. Several recent works deal with similar issues. Sachs and Warner a summarized the current literature and came up with a list of the variables that are most closely related to economic growth. Among other commonly known variables, their list emphasizes geographical and institutional indicators and human capital measures. In particular, Sachs and Warner b attributed the slow growth in sub-Saharan African countries to poor economic policies, especially a lack of openness to international markets.
They also claimed that this explanation makes the usual African dummy variable redundant. Bils and Klenow used returns on education from the labour literature to evaluate the contribution of schooling to economic growth, and found that schooling explained approximately one-third of cross-country growth differences. Hanushek and Kimko found that direct measures of labour force qualifications such as international mathematics and science test scores were strongly related to economic growth.
More specifically on the contributions of health and nutrition to economic growth, Arora investigated the influence of health on the growth paths of ten industrialized countries over the past to years. He found that improvements in health led growth rates to increase permanently by 30 to 40 percent. Zon and Muysken combined a health production sector and a human capital production sector with the Lucas endogenous growth model.
Sachs et al. Moreover, these authors also recognized family planning and access to contraceptives as crucial accompaniments of investments in health. In general, our findings echo this specific notion. The main research that we are revisiting in this paper was conduced by Arcand FAO, This author considers the impacts of two measures of nutritional status - the prevalence of food inadequacy PFI and the dietary energy supply DES - on the growth rate of real GDP per capita for countries  during the period from the s to the s.
Arcand reports that nutrition has statistically significant and quantitatively important effects on growth. He claims that inadequate nutrition is causing losses of 0. These results are robust in a wide spectrum of econometric procedures,  as well as in the critique that nutritional status measurements are widely overestimated. PFI is the fraction of the population whose daily energy intake is below a certain cut-off level.
Vice versa, it is also possible to reduce PFI without changing DES; for example, when energy intake is simply transferred from those above the cut-off level to those below. The relation between these two measures depends on how the energy intake is distributed across the population, as well as on the aid distribution system. Both of these systems are far from clear to external researchers, but we can extract useful empirical results from the data that they generate.
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Third, we have to remember that econometrics does not have answers to all of our questions. In particular, econometric procedures can recover only statistical relations and do not provide more useful information on the actual causality between variables, let alone on the direction of that causality. Such theoretical models also provide guidance in the search for possible transmission mechanisms between nutrition and growth. In particular, nutritional status is far from exogenous, and economic growth has been widely documented to have a positive impact on nutritional status.
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The evidence points to simultaneous determination, which leads to another related question: How responsive are these feedback effects? Although in theory there is a clear distinction between long-run i. Otherwise, the suddenly rapid growth might be a short-run blast to push the country into a higher but parallel path; i. As described in Solow , even transitory growth can last for a long time. Although we cannot identify what fraction of the growth increment is due to long-run effects and what fraction to short-run effects, it is still empirically very important to evaluate the impact of nutritional status on growth in various time frames.
For example, in a neoclassical endogenous growth framework, given a constant annual rate of convergence, the growth rate starts high then monotonically decreases and asymptotes the long-run steady-state growth rate. We evaluate the magnitude of these impacts empirically in following sections of this paper. We used a richer data set than that used by Arcand FAO, In particular, as well as the three observation points , and  reported in FAO , we also used average daily per capita calorie intake in most countries from to This allowed us to estimate more elaborate models with improved efficiency.
We paired this data set with annual real GDP information from the World Bank data set World Bank, to create the main panel dealt with in this paper.
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The positive correlation between the two variables is obvious. Figure 2 plots the growth rate of real GDP per capita with DES, and it seems that there is no clear correlation between them. This can be used as evidence against unconditional convergence if DES proves to be a good proxy for the initial level of real GDP per capita. Figure 3 is similar to Figure 1, but the relative inadequacy RI of the food supply in developing countries replaces DES on the horizontal axis. The negative correlation is once again obvious. Although the average difference between developed and developing countries shrank from 1.
Moreover, the two subgroups of developing economies that used to be at the bottom of the DES chart - East and Southeast Asian economies and South Asian economies - caught up and passed sub-Saharan African economies. Since the early s, the average for sub-Saharan African economies has been at the bottom of the DES chart, even though there are great varieties within the region.
South Asian economies come next from bottom.
We see a mirror image of this with RI. In sub-Saharan Africa, this indicator increased from 11 to 14 percent during the two decades, while East and Southeast Asia saw a dramatic decrease from 12 to 3 percent, and South Asia a decrease from 9 to 5 percent. As explained previously, RI is very closely related to the dispersion of energy intake across the population, while DES measures only the average level. Put simply, it is possible for RI to improve or deteriorate while DES remains intact; for example, by changing only the nutritional distribution. Parallel to the categorization of countries into developed and developing economies, we show similar figures for sub-Saharan countries and South Asian countries Figures 1a, 2a, 3a and 4a , for low-income food-deficit countries LIFDC Figures 1b, 2b, 3b and 4b and for least developed countries LDC Figures 1c, 2c, 3c and 4c.
These supplementary figures reiterate the fact that this group of countries suffers most from malnutrition. There are countries in this sample, 98 developing and 31 developed. Each country has a complete observation of both DES and RI for the three three-year periods , and There should therefore be a total of observations for developing countries and 93 for developed countries.
However, real GDP per capita data are missing for some countries for some periods. The missing data percentage is Since sub-Saharan African countries 39 countries and South Asian countries five countries are of major interest, we separated them from the rest of the world. Sub-Saharan Africa has a missing data percentage of We conclude that sub-Saharan Africa is properly represented by the sample. LIFDCs have a missing data percentage of We return to this point when discussing estimation results.
Figure 6 depicts the transition of cross-sectional DES distribution for all countries during the total four-decade period. From the s to the s and, especially, in the s, the difference between developing and developed countries shrank noticeably. But this trend was reversed in the s when the distribution went back to its distinctive twin-peak structure.
This indicates that the nutritional status of developing countries has worsened in recent years. We wanted to use simple tools to address a fundamental question: Does higher DES cause faster growth, or should the direction of causality be reversed? Maybe the effects exist in both directions?
Put another way, what do the data tell us about the dynamics of these two variables? The contemporaneous correlation is in the centre at horizontal mark zero. To the right is the correlation of lagged growth with current DES i. To the left is the correlation of lagged DES with growth i. The contemporaneous correlation is about 0.
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In order to describe the plot clearly, this figure can be interpreted as follows. Physical factors are considered "passive factors" of economic growth. They are not separate from each other, but hinge upon each other. These human resources are considered "active factors" of economic development. While the active factors of a country include such important measurements as the size of a population's rate of growth in both urban and rural areas, passive factors include the availability of land in each of those areas.
While the quality of a population, as measured by health standards, educational levels, and technology, is vitally important in influencing a nation's cultural and economic progress, the capital and land requirements for attempting these lofty improvements are inseparable from the equation.
A country which has developed the skills and knowledge of its people can exploit natural resources, build social economic and political organizations, and carry forward national development. That said, a country which does not pay attention to the passive factors that influence these goals will struggle to see the rapid growth in human capital that they desire.
Definition of human capital formation: Human capital formation is the act of increasing the productive qualities of the labor force by providing more education and increasing the skills, health, and notarization level of the working population. While there are many benefits to investing in the formation of human capital in LDCs less developed countries , it is not an easy process. Large populations deal with large issues. Faster increase in population: The population of almost all developing countries in the world including Pakistan is increasing faster than the rate of accumulation of human capital.
As a result, these countries are not making satisfactory use of sector expenditure on education which has accounted for 2. Defective patterns of investment in education: In the developing countries of the world, the governments are giving priority to primary education for increasing their literacy rates. Secondary education, which provides critical skills needed for economic development, remains neglected.
Another problem related to investment in education is that in the public and private sectors there is a mushroom growth of universities. These universities are a major cost to these countries. There are also mass failures at primary, secondary, and higher levels of education that result in the wasting of scarce resources that the country needs for other kinds of development.
More stress on the provision of buildings and equipments: Another major problem countries run into when investing in human capital in developing countries is that politicians and administrators lay more stress on the construction of buildings and the provision of equipments than on the provision of qualified staff.
It has been observed that foreign qualified teachers and doctors are appointed in rural areas, where there is little use for them. This misallocation of educational resources can negatively affect economic growth. Shortage of health and nutrition facilities: In less developed countries there is a shortage of trained nurses, qualified doctors, medical equipment, medicines, etc. Having less availability to health facilities poses a threat to millions of the people.
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The people are faced with unsatisfactory sanitary conditions, polluted water, high fertility and death rates, urban slums, illiteracy, etc. All of these deficiencies affect the health of the people and reduce their life expectancy. This reduces the growth of human capital. No facilities for on the job training: On the job training in service training is essential for improving or acquiring new skills. The result is that the efficiency of the workers and the knowledge held by the workers causes a growth in human capital.
The competence of the workers is of the utmost importance for the efficient use of human resources. Study programs for adults: Study programs for adults can also be introduced in order to improve a country's literacy rate. Study programs for adults have been introduced in many under developed countries around the world including Pakistan. They provide basic education, which increases the skills of farmers and small industrialists. Unfortunately, this scheme failed miserably, as the adults showed no interest in getting such training. Halfhearted measures for promotion of employment: Throughout most of the world, the ratio of unemployed or underemployed persons is very large.
To increase employment and reduce under employment, proper investment in human capital is required. This is visibly lacking in LDCs. A positive example is that the government of Pakistan has taken a number of steps to increase employment opportunities in the country, such as the establishment of the SME Bank for the promotion of self-employment at the grass roots level. This encourages domestic and foreign investment, which increases employment opportunities.
It also increases the number of technical and vocational training centers. Failure to plan for the best use of manpower: Due to the nonavailability of reliable data, there is little manpower planning in less developed countries. As a result, the demand for certain skills and the supply of those skills do not match.
Social capital and economic development: Toward a theoretical synthesis and policy framework
The result is that large numbers of skilled and highly qualified workers remain underemployed. The frustration and discontent among the unemployed and underemployed graduate and post graduates results in "brain drain. It is a huge loss in human resources for these developing countries. Neglect of agriculture education: In LDCs where agriculture is the main sector of the economy, very little attention is paid to educating the farmers on how to use modern agricultural practices.
Unless the farmers are provided agricultural education and training, they will not be able to raise the agricultural output and balance supply and demand. Sign in or sign up and post using a HubPages Network account. Comments are not for promoting your articles or other sites. I enjoyed reading your piece.