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Divergences and Convergences in Human Development

David Mayer-Foulkes ()

No HDRP-2010-20, Human Development Research Papers (2009 to present) from Human Development Report Office (HDRO), United Nations Development Programme (UNDP)

Abstract: I conduct a cross-country analysis of the human development index (HDI) components, income, life expectancy, literacy and gross enrolment ratios, using Gray and PurserÕs 1970-2005 quinquennial database for 111 countries. 1) A descriptive analysis uncovers a complex pattern of divergence and convergence for these componentsÕ evolution. Development is not a smooth process but consists of a series of superposed transitions each taking off with increasing divergence and then converging. 2) Absolute divergence/convergence for the HDI components is decomposed using simultaneous growth regressions including a full set of quadratic interactions between the HDI components, and indicators of urbanization, trade, institutions, foreign direct investment and physical geography. These are implemented, first, using three stage least squares, all of the non-exogenous independent variables fully instrumented, and second, as independent regressions with errors clustered by countries, again all non-exogenous variables instrumented. 3) A set of quantile regressions is run for the HDI component levels on the same variables (just the linear terms), again fully instrumented. Urbanization is a leading significant variable for human development indicators in both sets of estimates, stronger than trade, FDI and institutional indicators. These indicators act with ambiguous signs that may result from their distributive impacts, reducing their effectiveness. The results indicate that improving markets will have smaller returns than complementing them with institutions that can coordinate urbanization as well as investment in human capital. Urbanization itself can provide a concrete agenda for development involving all aspects of economic, political and social life as well as human development.

Keywords: human development; growth; convergence; divergence; urbanization (search for similar items in EconPapers)
JEL-codes: O11 O20 O47 O15 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2010-09
New Economics Papers: this item is included in nep-dev and nep-hap
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Published as background research for the 2010 Human Development Report.

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Working Paper: Divergences and Convergences in Human Development (2010) Downloads
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