Journal Issue

The Foundation for Better Health

International Monetary Fund. External Relations Dept.
Published Date:
January 1993
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GOVERNMENT policies outside the health sector—particularly ones that affect the macroeconomy, poverty, education, and women—can make large contributions toward upgrading the health status of the population.

Health status differs greatly among the world’s countries. Life expectancy currently ranges from 40 years or less in some countries of sub-Saharan Africa to 75 years or more in industrial countries. Even within regions, variations are large. In the early 1980s, child mortality was three times as high in Mali as in Botswana, and six times as high in Bolivia as in Chile. Rates of improvement have also varied by country. Between the early 1960s and the early 1980s, child mortality fell 20 percent in Bangladesh but 65 percent in Sri Lanka, and 10 percent in Haiti but nearly 80 percent in Costa Rica.

These enormous differences in health status and progress over time underscore the importance of public policy in shaping health outcomes. Climate and geography—which determine the range of diseases present—obviously affect health, but human behavior (interaction with health services) is also crucial. How people behave and what they can do is determined, to a great extent, by their income and knowledge. What then is the nature and strength of the link between these factors and health? And what can public policy do to strengthen people’s capacity to achieve better health?

The World Development Report 1993 argues that rapid income growth, particularly for the poor, in combination with investments in education, are critical in this regard. Because mothers play a central role in child care and household management in most countries, WDR 1993 stresses the need for specific policies, particularly in education, to enhance women’s capacity to achieve better health for themselves and their families. These policies work together to lay the foundation for better health.

Household capacity and health

Within the household, health improves rapidly as people escape from poverty and low education. Beyond the household, every society’s health services are affected by its national income, and its ability to acquire and apply new scientific knowledge depends on the level of schooling.

The role of income. Throughout the twentieth century, life expectancy has been strongly associated with income per capita (as Chart 1 shows). At any time, the higher a country’s average income per capita, the more likely its people are to live long, healthy lives. This effect tapers off as income rises: using the 1990 relationship, a doubling of income per capita (adjusted for purchasing power parity) from, say, $1,000 improves life expectancy by 11 years, whereas a doubling from $4,000 is matched by a gain of only 4 years.

Chart 1Higher income and technological progress add to life expectancy

Source: World Development Report 1993, World Bank.

Note: International dollars are derived from national currencies, not by use of exchange rates but by assessment of purchasing power. The effect is to raise the incomes of poorer countries often substantially. Data refer to all individual countries for which estimates could be made.

Income growth has more impact in poor populations because additional resources buy basic necessities, particularly food and shelter, that yield especially large health benefits. The relationship between income and life expectancy has improved over the course of the century as advances in science and medicine have made it increasingly possible to realize more health for a given income.

Because poverty has a powerful influence on health, it is not just income per capita that is relevant—the distribution of income and the number of people in poverty matter as well. In industrial countries, life expectancy depends much more on income distribution than on income per capita, and it has been rising faster in countries with improving income distribution. Japan and the United Kingdom had similar income distributions and life expectancies in 1970, but they have diverged since then. Japan now has the highest life expectancy in the world and a highly egalitarian income distribution. In the United Kingdom, where income disparity has widened since the mid-1980s, life expectancy is now three years less than in Japan.

In developing countries, the variation in the prevalence of poverty and in per capita public spending on health goes a long way toward explaining differences in life expectancy. Moreover, the adverse effect of poverty on health can be seen in health differences across rich and poor neighborhoods and families, even within the same city. For example, in Madurai, the second-largest city in India’s Tamil Nadu State, children ages 2–9 years in the poorest households were more than twice as likely to suffer from serious physical or mental disabilities as children from only marginally better-off families.

The strong link between income and health highlights the costs to health of slow economic growth. Child health has been improving everywhere, but the gains have been much smaller in countries with slow growth. In the 1980s—a decade characterized by constant or falling income per capita in developing countries—child mortality fell by almost 30 percent in countries where average incomes fell; in countries where average incomes grew by more than 1 percent a year, child mortality fell twice as much. Had economic growth been as fast in the 1980s as in the period between 1960 and 1980, in 1990 alone an estimated 350,000 deaths, or 6 percent of total infant deaths, would have been averted in developing countries, excluding India and China.

The role of education. Households with more education enjoy better health, both for adults and children. A mother’s schooling is an especially powerful determinant of child health. In Peru, for example, seven or more years of maternal schooling reduces child mortality nearly 75 percent, or about 28 percent more than the reduction for the same level of paternal schooling. The advantages that a mother’s schooling confers on her children’s health are felt even before birth, and they continue to operate throughout the childhood years. Better-educated mothers marry and start their families later, diminishing the health risks of early childbearing. They also tend to practice better domestic hygiene and make more effective use of health services. In general, they are better at getting information on health and acting on it.

Among adults, health depends strongly on personal habits and lifestyles. Because educated people tend to make choices that are better for their health, there is often a strong relation between schooling and health. In Russia, death from coronary heart disease is two to three times as common among the poorly educated as among those with higher education. In Brazil, adults with primary schooling or less are about five times as prone to high blood pressure as those with postsecondary schooling. Educated people are quicker to modify their behavior as new health threats arise (such as AIDS) or in response to new information about health. In the United Kingdom, for example, the proportion of smokers among adults declined by 50 percent between 1958 and 1975 among the most educated, but hardly changed among the least educated.

Strengthen household capacity

Given the strong links between better health and income and education, the policy implications are clear: governments should work to boost economic growth, reduce poverty, and expand schooling (especially for girls—one of the most effective ways of strengthening women’s ability to care for their families).

Promoting growth and reducing poverty. It is difficult to reduce poverty without economic growth, so establishing sound economic policies is one of the most valuable things a government can do. This is exactly what many developing countries did in the early 1980s, as they tried to cope with severe external shocks and rectify misguided domestic policies. They adopted macroeconomic reforms to control inflation and to maintain sustainable external and internal monetary balance. They also undertook microeconomic and institutional reforms to promote the efficient use of resources.

To support these reforms, the World Bank and the IMF have been extending adjustment lending, which is designed to cushion the transition to new and higher growth paths. This lending facilitates economic progress and, therefore, health gains in the long run.

How have adjustment programs affected health? Studies demonstrate that central government expenditure on health in countries with adjustment lending programs did not suffer more than elsewhere (although the outlays by states and local governments must also be taken into account). Indeed, comprehensive data available for 20 countries—which included these outlays—show that in countries with and without adjustment loans, public spending on health as a percentage of GDP declined in the early 1980s in relation to the average for the decade (Chart 2). But in 1985–90, health spending and per capita public health spending recovered faster in countries that were receiving adjustment lending.

Chart 2Public spending on health recovered faster in countries that received adjustment lending

Deviation from mean levels of public spending on health in countries receiving and not receiving adjustment lending

Source: World Development Report 1993, World Bank (Yazbeck, Tan, and Tanzi, background paper).

Note: Recipients of adjustment lending include countries that received two structural adjustment loans or three or more adjustment operations, all effective by June 1990, with the first operation effective in or before June 1986. Data were available for the following countries in this group: Bolivia, Brazil, Chile, Costa Rica, Kenya, Republic of Korea, Mauritius, Mexico, Pakistan, Philippines, Turkey, and Uruguay. Nonrecipients are countries that had not received adjustment lending by June 1990. Data were available for Burkina Faso, Dominican Republic, Egypt, El Salvador, Guatemala, Liberia, Malaysia, and Papua New Guinea.

What about the short-run effects of adjustment lending? Evidence from sub-Saharan Africa and Latin America suggests that the short-run economic downturns associated with adjustment programs do slow the rate of progress in improving health. However, the falls in income and the slowdown in health improvements are caused not by adjustment lending itself, but rather by the necessity for the country to change policies and curb consumption. Without adjustment loans, even greater decreases in consumption would be necessary.

Studies also show that the potentially adverse effects of adjustment programs on health in the short run can be cushioned by appropriate policies. In developing countries in which these programs were first implemented in the early 1980s, budget cuts tended to be indiscriminate, failing to preserve those elements of the health system with the strongest long-term benefits. In Côte d’Ivoire, for example, health expenditure was reduced in real terms by 12 percent between 1980–84 as part of the government’s adjustment program. However, personnel costs were not cut; instead, public expenditures on scarce medicines and materials absorbed the reduction, shrinking in real terms by more than one third. But since 1990, this policy has been reversed, with the government putting more resources toward nonwage health inputs. Not surprisingly, health services have begun to improve as a result.

Improving and expanding schooling. Governments can and should do more to build on the substantial progress in schooling that has occurred in developing countries since the 1960s. On average, about 10 percent of boys ages 6–11 still do not enroll; for girls in the same age group, the figure is 40 percent. Leaving aside the gaps in enrollment, education in many countries is inadequate; many children who complete primary schooling fail to acquire basic literacy and numeracy skills or scientific understanding.

Clearly, governments should ensure that all children receive a minimum quantity of schooling—say 5,000 hours, or roughly 6 full years. Most pupils in developing countries currently receive much less than this minimum: in India, no more than one third of girls reach this level, and in China and Latin America, only 60 percent do. But this will require a significant and sustained policy effort. Government funding of schooling at the lower levels and for girls is especially justified, in part because the associated benefits for society are large. More spending alone, of course, is not enough. Whatever is spent must also be used efficiently. In some settings, allocating resources to improve the health and nutrition of school-age children may be an efficient way to improve schooling, not least because healthier children are more likely to learn better and persist in their schooling.

What can be done?

Around the world, much has already been done to enable people to live longer, healthier lives. The achievements of the past point to the requirements of the future. According to World Bank projections, income per capita in sub-Saharan countries will grow by only 0.8 percent a year over the next ten years. But even this modest increase will bring about a decline in the infant mortality rate of 2–4 percent. In South Asia, where faster growth (3.3 percent a year) is projected, infant mortality declines of 15 percent can be expected. These benefits can be powerfully reinforced by better education. In India and Kenya, for example, 2 maternal deaths and about 45 infant deaths would be averted for every 1,000 girls provided with 1 extra year of primary schooling Policies that promote economic growth, reduce poverty, improve schooling, and empower women play a crucial role in health because they enhance people’s ability to choose healthier lifestyles.

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