Augmented Human Development in the Age of Globalisation

March 16, 2021 | Blog
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This blog is based on an article forthcoming in the Economic History Review, now available on Early View at


by Leandro Prados de la Escosura (Universidad Carlos III)

Evolution of human development in the 2000s. Available at Wikimedia Commons

Wellbeing is widely viewed as a multi-dimensional phenomenon affected by material goods, as well as  health, education, agency and freedom. Human development, ‘a process of enlarging people’s choices’, provided the basis of the index (the HDI) created by the United Nations  thirty years ago.  In this article, I present a new Augmented Human Development Index (AHDI) that combines measures of health, education, material living standards, and freedom, for up to 162 countries over one and a half centuries.  Globally, augmented human development (AHD) grew substantially from 1870; in 2015 it was over five times the level attained in 1870, but significant room for improvement exists.

In terms of distribution, relative inequality in AHD increased prior to World War I, after which it experienced a steady long-run decline from the late 1920s.  However, absolute AHD differences between countries increased to the mid-twentieth century, and declined only from the 1960s. Closer examination reveals that middle and low-human development countries achieved larger relative gains in the long run, but the top 10 per cent of countries obtained the largest absolute gains.

Gains in augmented human development were spread unevenly across the globe. The absolute gap between the most advanced regions (Western Europe, Japan, and OECD) and the rest of the world deepened over time, although it fell in relative terms from the late 1920s.   A development puzzle becomes apparent: progress in economic growth and human development are not aligned. During the backlash against economic globalization (1914-1950), while real per capita GDP growth slowed as world commodity and factor markets disintegrated, AHD experienced major gains across the board. Conversely, in the post-1950 era, AHD advanced less rapidly (Figure 1).


Figure 1. Augmented Human Development (excluding the income dimension) and Real Per Capita GDP Growth (%)  Notes: the AHD data exclude income. Source: as per article.


Exploring the determinants of AHD over the long run may explain why its trends were uncorrelated with those of GDP per capita. Life expectancy was the main contributor to the long run progress of AHD, especially between 1914 and 1970. Education was a steady contributor to AHD during the time period. ‘Freedom’ was a substantial determinant of AHD, especially in its last two decades of the twentieth century.

What explains the timing and depth of the contribution of  life expectancy and schooling to human development?  It is commonly assumed that economic progress and higher levels of income per capita facilitate the allocation of more resources to social services that improve people’s health and education.  However, over the last one hundred years, gains in longevity and education have taken place across the board, including countries in which  social spending barely expanded and income growth has faltered. Although economic growth results in improving nutrition — which strengthens the immune system and reduces morbidity, growth in the provision of public services and improvements in medical knowledge were the main sources of the sustained increase in life expectancy. The major improvement in longevity between 1920 and 1970 originated in the discovery and diffusion of the germ theory of disease, which led to the epidemiological transition in which infectious diseases were surpassed by chronic diseases as the main cause of death.


Figure 2. Drivers of Augmented Human Development in the World, 1870-2015 (%). Source: as per article.

It is also assumed that global health improvements only occurred after World War II, when new drugs from advanced economies diffused across the world. However, in developing countries, life expectancy provided half the gains in human development between 1914 and 1950, a period during which a large proportion of the population in the rest of the world was under colonial rule and the new drugs were largely unaffordable for the population. This observation suggests that the epidemiological transition spread beyond advanced countries during the 1920s. In fact, the germ theory of disease led to the diffusion of preventive methods that lowered disease transmission. The result was to reduce mortality, especially infant and maternal deaths. By the 1970s, the diffusion of the epidemiological transition was largely exhausted in the rest of the world and this trend helps explain the weakened contribution of life expectancy to improving human development after 1970.

The renewed contribution of life expectancy to human development since 1990 was largely restricted to advanced countries. The second health transition, which is associated with declining mortality among the elderly, has not extended to the rest of the world. This trend explains why improvements in human development between 1990 and 2010, were largely restricted to the OECD.



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