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The Priority of Human Development

By Frances J. Stewart | Social Science Research Council | July 1, 2005

By Gustav Ranis and Frances Stewart
Social Science Research Council
The Development Imperative: Toward a People-Centered Approach, New York: Social Science Research Council, 2005.

Introduction

Since 1990, with the publication of the United Nations Development Programme’s first Human Development Report, the concept of Human Development has been strongly advocated as the central objective of development, in place of economic growth.2 Its intellectual antecedents may be traced to Sen’s concept of capabilities and the earlier basic needs approach.3 Although mainstream thinkers sometimes acknowledge the concept of human development, economic growth generally remains their prime policy objective.This is one important reason for exploring the relationship between the concepts of Human Development (HD) and economic growth (EG), drawing policy implications from the analysis. The first Human Development Report stated that,“The basic objective of development is to create an enabling environment for people to enjoy long, healthy and creative lives” (UNDP, 1990, p. 9), and defined human development as “a process of enlarging people’s choices” (p. 10).This definition is, of course, very broad. For the pur- The Priority of Human Development Gustav Ranis & Frances Stewart Frances Stewart is Director of the Centre for Research on Inequality, Human Security and Ethnicity (CRISE) at the University of Oxford. Gustav Ranis is Frank Altschul Professor of International Economics at Yale University’s Economic Growth Center. pose of empirically exploring the links between HD and EG, we need, for now, to narrow it down.We shall consider the HD of a country as consisting of the health and education of its people, recognizing that this is very much a reductionist interpretation. Clearly, there exists a strong connection between EG and HD.On the one hand, EG provides the resources to permit sustained improvements in HD. On the other, improvements in the quality of the labor force are an important contributor to EG. Although many observers accept that economic growth affects human development, and that human development (interpreted as “human capital”) affects economic growth, the important implications of the interrelations between the two are rarely taken into account.Yet, it is important to understand the full implications of this two-way linkage because this affects both analysis and policy.

Copyright 2005 Social Science Research Council

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