Human Development

Published on November 26, 2008 By Paul Bourne In Philosophy

An examination of the relationship between public expenditure on social programmes and levels of development

Paul Andrew Bourne, 2006

Department of Government

Faculty of Social Sciences

University of the West Indies

Mona Campus

Kingston, Jamaica

TABLE OF CONTENTS

Page

CHAPTER 1: INTRODUCTION/BACKGROUND

Conceptual framework

The research problem

Significance of the study/Rationale

Objectives

Limitations

CHAPTER 2: LITERATURE REVIEW

CHAPTER 3: METHODOLOGY and METHODS

Introduction

Explanatory Model

Hypothesis

Conceptualization

Operationalization

Variable identification

Population

Analysis Plan

CHAPTER 4: ANALYSIS AND INTERPRETATION OF DATA

CHAPTER 5: DISCUSSION and CONCLUSION

REFERENCES

LIST OF TABLES

Page

Table 4.1: Descriptive Total Expenditure on Public Health

(As percentage of GNP HRD, 1994)

Table 4.2: Descriptive statistics of Expenditure on Public Education

(As percentage of GNP, HRD, 1994)

Table 4.3: Descriptive statistics of Human Development

(Proxy for development)

Table 4.4: Bivariate relationships between dependent and independent variables

Table 4.5: Summary of hypotheses analysis

LIST OF FIGURES

Page

Figure 1: An explanatory model of the dependent and the independent variables

Figure 4.1: 1990: Total Expenditure on health (as a % of GDP, HDR, 1994)

Figure 4.1: 1990: Total Expenditure on Education (as a % of GDP, HDR, 1994)

ABSTRACT

The development discourse continues to unfold from its genesis in economic growth (i.e. growth) to having multi-dimensional tenets outside of the classical growth model and the Keynesian growth theory, which is human capital formation. Westerners, for example, Todaro, United Nations, Haq and Rapley see development completely different from the classical and the Keynesian scholars. The classicalists and Keynesian economists theorize development from the demand side, which are persistent increases in growth. The consensus among developmentalists, on the other hand, is that the phenomenon is based on the expansion of choices. Hence, from the critique of various scholarships on development theories, development is simply not the outcome of a single determinant such as the increase in economic production over one year, as man’s choices are multispatial and temporal, and so the phenomenon must be operationalized beyond the purviews of persistent increases in Gross Domestic Product (GDP). Another scope of development is the supply side: quality, flexibility, the efficiency in combining and utilizing productive resource, the adoption and use of technology, creativity, capacity for the organization and social discipline, savings, and the competency to compete international. With this being said, a fundamental issue in this debate is the discussants, and where they received their training as this will guide their interpretation and research of the observable fact. As economists, for example, Milton Friedman and Michael Todaro, development is equally influenced by non-economic forces. Non-economists, for example, Rostow and some post-modernernist and developmental economists alike believed that various indicators such as educational opportunities, health care status of a group of people and defense influence human development. This research presents a thorough discourse of development, using various scholarships, but is primarily concerned with the relationship between development and particular expenditures by government on education and health care. This project is a quantitative one; therefore, the researcher used secondary survey data collected from different countries across the globe to determine the association between and among variables. The findings show that the relationship between development and public expenditure on health, and development and government expenditure on education are indeed moderate.

Key words: Paul Andrew Bourne, development, economic growth, public expenditure on education, public expenditure on health, human development, economic growth, Michael Todaro, John Rapley, Milton Friedman, Classical and Keynesian theorists, United Nations.

Chapter 1

INTRODUCTION: CONTEXTUAL BACKGROUND

Neither economic growth nor ‘economic and social development’ is an end in itself. Each is a means of improving the living conditions of people, and first of all of people who live under miserable conditions. Development assistance should be looked upon as an instrument to reach this ultimate target.

Economists often express the opinion that economic growth is a necessary, albeit not sufficient, condition of future improvements in the living standard of the masses. This leads to the conclusion that consumption today must be restricted in order to permit higher savings and faster growth. This thinking has created a bias towards ‘productive investments’ and against steps to improve the living conditions of the ordinary man, woman and child. So-called ‘social services’ have been given low priority in the development plans of the developing countries. New ideas are now gradually breaking through. Knowledge and better health are now looked upon as factors which improve the productivity of the individual. For this reason alone more emphasis has been given to education and to health services in recent years (Norbye, 1974: 13)

Development has taken on a new meaning from earlier times when it was viewed solely as an economic phenomenon (see Adam Smith’s Wealth of Nations; Lewis 1954, 1955, 1964, 1977; Sunkel 1993; Rapley 2002; Hettne 1995; Marglin and Marglin 1990). One scholar refers to the Gross National Product (GNP) growth model as ‘political economy growth model’ (Easterly, 2001: 1). Today, development is multi-disciplinary (see for example, Todaro, 2000; Ramirez, Ranis and Stewart, 1997; Norbye, 1974) and is not limited to economic indicators (for example the increase in goods and services produced in a state, and/or changes in capital formation). This phenomenon is of fundamental concern to other non-economists as it speaks to the conditions of existence of people (Norbye, 1974), and therefore extends beyond an economic study. Development, within contemporary context, is the expansion of human choices (see for example Ramirez, Ranis and Stewart, 1997).

In order that an expansion of choice becomes possible, the quality of labour must be improved along with other external variables. According to Ramirez, Ranis and Stewart (1997), human development transformation is a function of government expenditure (Ramirez, Ranis and Stewart, 1997: 4), which includes, for example, expenditure on education and health. But Haque (2004) noted that the dominance of classical (or neoclassical) and/or the Keynesian (post-Keynesian) growth model (economic growth or Gross National Product – GNP) arose primarily because of the political structure. The theorizing forwarded by Haque on the use of GNP to measure development (void of sociodemographic and political factors) rests squarely on the pillars of the capitalists system, and its dominance in world power. This justifies the re-emergence of this conceptual definition of development again in the 21^st century (Haque, 2004: 3).

In Haque’s monograph, an explanation was made for this revitalization of GNP as the measurement of development and welfare, he/she argued that “According to Streeten (1979:21-22), due to the ‘result of the propaganda of politicians and economists, aided by the transistor radio, television, and jet planes, economic growth came to be regarded as a human right” (Haque, 2004: 2).

In the early 1980s, there was a marked difference between social research and theories according to Booth (1994). Booth saw where critical world issues were not being dealt with and was leaving “skeptics” to wonder about the relevance of academic studies on development. However, in this paper, the critical development issues discussed will be base on the views of Booth. In order to give a more comprehensive view in terms of research proposal, Jamaica will be using as reference to highlight health facilities and how these facilities improved or worsened as the population develops. During the 1970s, health facilities were greatly improved and as a result, the Infant Mortality Rate decreased from 32.5 per cent prior to 1970 to 11.3 per cent in 1980.

Development has been treated by economists as if it were nothing more than an exercise in applied economics, unrelated to political ideas, forms of government, and the role of people in society. It is high time we combine political and economic theory to consider not just ways in which societies can become more productive but the quality of the societies which are supposed to become more productive-the development of people rather than the development of things.

(Owens, 1987: xv)

Despite non-developmental economists’ position on development, in that their definitions lack social coverage and it is biased in keeping with an economic construct, the fact is, we are seeking to comprehend an phenomenon which began from the bowels of economics; and so the issue that must be understood by readers is the trajectory of the construct and its constituent today. The fact is we need to lay a foundation of development that will aid an evaluation of development over the decades. As such, the phenomenon must be understood for its present construct. Hence, the researcher will broaden the construct of the non-developmental economists’ definition of development to incorporate health, education, leisure, increased social amenities and social expansion of resource to people within the geographic locality defined as Jamaica. This position will concur with the perspective of development economists like Michael P. Todaro. In addition, the new definition seeks to address political ideological changes, forms of government and how those phenomena impact on development.

A development scholar writes that, “in the early 1980s there was a widely shared sense that social research and theorizing about development had reached some kind of impasse” (Booth 1994). He continues that “crucial real-world questions were not being addressed and the gulf between academic inquiry and the various spheres of development policy and practice had widened to the point where practitioners were raising fundamental doubts about the ‘relevance’ of academic development studies.” Hence, Booth’s viewpoint highlights a dimension of the development discourse that was intensified since the 1950s: as development is multi-faceted; and so cannot be conceptualized by scholars as a single one-dimensional phenomenon (Todaro, 2000; Hettne, 1995; Haq, 1987).

This discourse has taken on even a new persona in the last two decades. Traditionally, this phenomenon was seen as primarily economic (Kurnets, 1989; Hogendorn, 1987). John Maynard Keynes is considered a pioneer in traditional economic development by many academics (Rapley, 1996) and he forwards a perspective that development is fostered by economic growth. This is a change in the economic activities of a country due to an increase in the production of goods and service when saved over time (Beardshaw, 1992). This is, therefore, the primarily indicator for development. Keynes’ theorizing is adopted from Adam Smith’s early theorizing on development. Their views are that economic development is fostered by a smoothly operated capitalist economy (Rapley, 1996, p. 6-7).

According to Rapley (1996, p.7), “state interventions to relieve poverty would inhibit initiative, and would stifle investment because they would rely on increased taxes.” Dr. Rapley’s cites perspective is a clear indication of the stance taken by all traditional economists. This stance sees development as solely an economic growth phenomenon that is driven by the free market but many post World War II economists differ on a theorizing for this construct. Lewis concurred with classicalists like Smith and Keynes that development is primarily economic. Rapley (1996) states that, “Lewis argued that in a Third World economy, the wage rate was set at a constant level as determined by minimum levels of existence in traditional family farming”(p.16). This ensures a virtually unlimited supply of cheap labour, which has an advantageous factor in industrial development (Rapley, 1996 p.16). As a social scientist who is concerned with development, I am cognizant of the different discourse on the matter and so before coming to a consensus on a final perspective on the topic, all the schools of thoughts will be presented herein. This means that the researcher will take a particular theorizing to measure development for this paper.

The Organization of Eastern Caribbean States (OECS, 2002) in one of their reports writes that, “while material poverty affect a large number of households, the Report points to the impending dangers of more widespread and subtle forms of poverty that include poor health, inadequate levels of educational attainment; lack of economic assets or access to markets or jobs that could create the unsafe physical environment; and various forms of social exclusion.” This report forwards the core of the post-1950 scholars’ viewpoints on development that is it is broader than the Classicalists’ theorizing that was once the epistemological framework on development. The report points to other non-economic growth theorizing such as health care, education and other psychosocial conditions. Hence, the researcher will not seek to continue in the pre-1950s epistemological mindset as it is a one-sided theorizing but will seek to quantify any validity of the contemporary developmentalists’ perspective on the issue as this include social, political and economic factors. This research surrounds the social aspect to development in the form of expenditure on health care and expenditure on education with the intention of using those two (2) determinants of contemporary development in order to ascertain any causal and/or associational relationship between expenditure on social programmes and their influence on levels of development in Jamaica.

According to Social and Economic Survey of Living Condition, Jamaica had the second lowest infant mortality rate and the second highest life expectancy of the six countries studied. Within the context of the United Nations Development Reports, life expectancy is a determinant of human development. Thus, this speaks to the health status of the populace, and its progression in development indicators.

Professor Rex Nettleford quotes that “Jamaica’s infant mortality and life expectancy levels have improved steadily to the point where the country’s health indicators are considerably above the third world norm moderately better than that for middle income countries and slightly below industrialized countries. In the case of infant mortality improvement, the arte of exchange in Jamaica matches that achieved in the United States of America over the 1938 to 1980 period and is considerably above that achieved in most middle income developing countries. Much of this is due to increased spending on health services as overall public spending increased.”

Professor Nettleford states that the health indicators have improved since 1938 and that the social position of Jamaicans has significantly improved. This he says is because of spending on health care services.

When individuals are malnourished, the health of these individuals would affect them in terms of their physical and mental states. A medical practitioner, Dalzell-Ward (1974: 23) commented, “The deprivation of energy foods’ will result in excessive fatigue which will in turn diminish social and work performances and interfere with well-being.” There is however, the indication of a level of development, where as if an individual is not in the best of health, this will contribute to fewer hours worked and reduced production. The economist Adam states that this would be an indication of reduced economic growth. Professor Todaro from his perspective, development envelopes social, political and economic changes in peoples lives. Another medical practitioner concurred with Dalzell –Ward (1974) when she said:

“In fact many of today’s problems with students are actually health related. Kids are not able to learn sufficiently if they are hungry, tired, hung-over form alcohol, or worried about violence. We need to eliminate barriers that affect students’ readiness to learn. A variety of physical and mental conditions impact students’ attendance and their ability to pay attention in class anger, and restrain from self-destructive impulses.”

CONCEPTUAL FRAMEWORK

The determinants of development and their influence on peoples’ quality of life were examine by Adam Smith and along with others from classical school saw development from an economic point of view. They argued that development is primarily a function of economic point of view. They argued that development is primarily a function of economic growth.

Adam Smith was the chief among many scholars who forwarded a theory on the determinants of development and their influence on peoples’ welfare. Smith and other economists within the Classical School theorized that development was due to persistent economic growth. They argued that development is solely a function of economic growth [the example here is Development = F (Economic Growth)]. The pre-1950 developmental theorists were convinced that development was a single social science factor but Hettne (1995) forwarded a point of view that the fathers of development theory was ‘euro-centric’ (p.21).

Many persons inadvertently and incorrectly interchange economic growth with economic development as though they are synonyms but these are two distinct phenomena. Economists posit that ‘economic growth’ is an increase in the Gross Domestic Product (GDP) of a nation.[1] GDP is the aggregate of all goods that are produced, distributed and consumed in an economy in a given year.[2] As such, an increase entails the employment of more factors of production (land, labour, capital and entrepreneurship). Equally, G.D.P is the aggregate of the factor incomes. Apart from the definitional properties of G.D.P, the reader must understand a thorough understanding of this measurement of production in order that s/he is able to grasp the issues that will be critically presented in this paper.

Gross Domestic Product’s Growth does not automatically disaggregate into a share of production to each sector within the economy. The growth of the economy may entail all sectors getting proportionately more or proportionately less than other sectors. It has been the case on a wide scale that the owners of capital, the entrepreneurs, have been receiving significantly more of the GDP than the other participants. It is this disparity between the wage earners and the owners of capital that must be addressed in order to develop the human capital of the population as a whole. This is especially the case when capital is very unequally distributed. An increase in productive capacity of an economy may not have been for the general good of all peoples therein but may be due largely to small sub-sector of the populace.

Economic development, however, is significantly different from that of economic growth. In that, “Development in human society is a many sided process. At the level of the individual it implies increase in skill and capacity ………… and material well being”.[3] Implicit in that definition is the accumulation of the surplus of individual firms. In order for this surplus to be meaningful as a human indicator of development and large enough to ensure the survival of firms and improve the standard of living of those employed by the firm, the surplus cannot be consumed after a day. If this is done, then the standard of living of the workforce will decline and this decline is concomitant with the lack of development in the domestic economy.

Economic growth in some economies can then be associated with immizerization, in that economic growth may result in misery. This occurs when economic growth causes a high proportion of the population to become impoverished while a smaller proportion accumulates substantial wealth. As such, this growth may lead to impoverishment of a sector or some sectors within the economy but this cannot be the case for economic development implies the improvement in human capital that is not important for growth.

From that school of thought, economic growth is the force behind any development of a society. The transformation of any society beyond its past is accounted for by the saving of resources from economic growth. Therefore, economic development is the transformation of the base of an economy. This is attained through physical infrastructural changes in that society. The Classical School believed that economic growth increases standard of living of the people. This is accomplish by the peoples being able to afford more of the same goods and-or better quality items. Furthermore, the Neolassical theorists on the issue of economic development believed merely that this was an extension of conventional economic theory that equated "development" with growth and industrialization. Because of that construct, Latin American, Asian and African countries were seen mostly "underdeveloped" countries that is, "primitive" versions of European nations that could, with time, "develop" the institutions and standards of living of Europe and North America.

On the other hand, the modern economists believe that development is broader than economic growth. Professor Michael Todaro purported that there are three (3) objectives of development. Firstly, they are “increase the availability and widen the distribution of basic life – such as food, shelter, health, and protection. Secondly, to raise the levels of living, including, in addition to higher incomes, the better jobs, better education, and greater attention to cultural and humanistic values, all of which will serve not only to enhance material well-being also to generate greater individual and national self-esteem. Finally, he purported the expansion of social choices.” Based on Professor Todaro’s position on development, this includes the improvement in the quality of life of people through social, political and economic determinants.

Sustainable development was defined by the World Commission on Environment and Development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Development in this context refers to societal as well as economic development. Sustainable development encompasses human welfare, economic growth, stability, environmental protection, and conservation. It seeks to meet the needs of the present while conserving resources for future generations.

Economists see economic growth as the creation to build the country’s Gross Domestic Product (GDP) within a specified time, usually twelve months. From that perspective, therefore development is the transformation of the foundation within an economy. In other words, the transformation of any modern society has its own record as to its achievement and utilizing well its limits resources from economic growth.

Classical theorists had the tendency to show a linkage towards conventional economic theory and “development” with growth and industrialization. Latin American however, perceived this idea, Asian and African countries as “underdeveloped countries.” It is worthwhile to remember Professor Todaro’s position on development that focuses on improvement in the quality of life of individuals through social, political and economic means.

THE RESEARCH PROBLEM

For this thesis, the research problem is entrenched in can be transform Third World economies to that of First World societies within the context of the former’s structural inadequacies, technological base and capacity, capital insufficiencies, substandard labour, geographic topography and size, political institutions and so forth? Can developing countries use agriculture to create development, or even if they were to have their government invest in education and health, could this drive development?

Development began from the classicalists’ and Keynes’ perspective, that it was only driven by economic growth (i.e. capital formation), but that period does not hold supremacy any more. Today, there are many non-economic tenets of development. As a discourse, ‘development’ symbolized features of our globe– “the processes, relations, and structures of the material world, in ‘mental world’ of thoughts, feelings, beliefs and so forth, and the social world” (Waller 2006, 19). Other scholars see this construct as the widening of people’s choice and well-being (for example Hettne, 1990; Todaro 2000). A fundamental issue in all this, however, is can developing countries with all their social institutions and structural inadequacies expand their peoples’ choice using, for example, education and health?

The development process denotes the ways of acting, and the social actor experience and training and thus his/her interpretation of the phenomenon. Simultaneously, the processes and phenomena manipulate and transform what symbolically represent and constitute development.

The discourse of development has expanded from Adam Smith’s perspective to neo-liberalism, neo-Marxism, Orientalism, Africanism, Islamism, Subaltern Studies, pan-Caribbeanism, pan-Africanism, post-developmentalism, cultural-hermeneutic or cultural studies, feminism, post-feminism, post-modernism, post-structuralism long with critical-dialectical, social-democracy, indigenous development and social movement theorizing of development.

Despite the classicalist school theorizing that development was primarily a determinant of economic growth (i.e. capital formation), clearly analyzing this variable supports the rationale of modern developmentalists that it is expandable by human capital formation and training. Embedded in this, therefore, is the capacity of humans. As economic growth is not likely to expand itself but must do within the input and creativity of humans. Hence, a healthy human is able to create more goods and services than one who spend more time remedying health problems. But this is not the only aspect to the expansion of growth, as more education, according to Milton Friedman, increases human capacity that influences production and productivity; thereby translating into growth and development.

The issue here is, the classicalist school is able to justify its claim of using persistent economic growth to indicate changes in development, but is it possible that non-economists such as political and social scientists use empiricism to objectively state that development can increase and/or change with changes in public expenditure on education and health.

A fundamental issue in this the development discourse is tied to the Western definition and the results from its applications. If Western theorizing on development holds true, then the advent of redeveloping Third World states should have materialized now? Institutions for example the World Bank (International Bank of Reconstruction and Development), the International Monetary Fund (IMF), and World Health Organization have sought to develop Third World economies, and World Bank in particular have aided the construction of Roads, Bridges, Education, Technologies and other physical infrastructure in these states but these are still to transform into development, where that society will be transformed from its underdeveloped state to that of a developed state. Hence, the question arises, should we invest in education, health and defense, along with other social programmes as a medium of expanding and transform the choice of people (i.e. creating development)? As, for example, the World Bank and the World Health Organization have invested substantial in education and health in developing states, but this has not transformed into development for the people.

One scholar argues that development is an elusive concept, the realty is, it is a Westerner ideology (for example, that of Europe, United States of America, Canada). He cites a sentence that contextualizes the development problematic, by saying that:

Thus, in spite of the fact that development theory emerged from tentative attempts at understanding the problem of ‘underdevelopment’ from the point of view of the ‘developed’, it gradually acquired an increasing universal quality, i.e. an authentic universalism in contradiction to the false universalism that characterized the Eurocentric phase of development thinking (Hettne, 1990: 2)

With all those thesis and antithesis of development, firstly, an issue is can expenditure on social programme ever result in development? Secondly, from an economic growth perspective, it is argued that direct foreign aid and internal development strategies are frequently touted as stimulants for development, then, with the aid from the World Bank, the IMF, the World Health Organization and other institution, why has developing countries (see for example economies in Africa – Banae and Yandell, 2006), in particular Jamaica, not psycho-socially transformed the well-being of its citizenry?

Here is the reality that befalls developing countries. The example here is embedded in a monograph penned by some scholars. They wrote that:

Latin American has been suffering a major economic and financial crisis, its worst since the Great Depression of the 1930s. Throughout the 1980s, per capita income in the region fell well below the levels of the late 1970s, a trend that has not yet been reverse in most countries, with devastating social effects and unpredictable political consequences (Ramos and Sunkel, 1993, p.5)

Ramos and Sunkel (1993) monograph when analyzed within the context of increased world trade, high economic growth and development in developed countries, the argue now is can use trust the definition of Westners on development, and can be accept their approach that development is possible for developing countries? Furthermore, is it probable to have development in developing countries comparable to that experienced in the developed states, and can use the social programmes and other stated conditions to stimulate growth and development?

Both classicalists and neoclassicalist, alike, theorize that economic growth is a vital component of development (Lustig, 1993, p.61). The belief is increases in real GDP (i.e. more goods and services being produced) is as a result of increases in – capital formation, labour, land usage, or technology. It is this persistent increase that creates excess capacity and is afterward transformed into development. The classical and Marxist theories forwarded that poverty and income distribution worsens in periods of economic growth (Lustig, 1993, 61). Within the ambits of this preposition, development is whose development? On the other hand, the neoclassical school theorized that living standards and income distribution improved with increases in real GDP. Based on the two schools of thought, there is inconclusivisity as to growth and income distribution. According to Lustig (1993, 62) that, “…Kuznets, who, on the basis of his observations on time series in developed countries, proposed the theory that income distribution worsens during the initial stages of economic development, improving thereafter.” The issue here is whose position as Caribbean scholars should we take, and can be argue within the same ambiguity that government intervention in an economic with result in development, and development for whom?

This research will seek to address this area of concern in the literature and will imply from the use of expenditure on social programmes, for example on education and health, that human capacity increases. From this vantage point, an increase in public expenditure on social programmes will denote increase in human capacity. With this expanded human capacity, the research will generate a model that shows that such an improvement will increase development in the broadest sense of the word.

SIGNIFICANCE OF STUDY

It is quite a challenging issue when it comes to developmental issues. Many third world countries, those of Latin America and the Caribbean of which Jamaica is a part suffer from issues of development, poor health facilities, bad living conditions and infrastructural problems. Hag analytical argument is the focus on this paper. Despite Hag’s writings and analyses, the World Bank Report on World Development have shown that central government expenditures on health and education have declined in low developing countries. This was evident in the period 1980-83 and 1985-86. Could the question be asked then what are the main reasons for the poverty that surrounds third world peoples in particular?

Haq et al (1987: 21) in Human Development, Adjustment and Growth wrote, “The objective of ‘development’ is people.” Yet an examination of the improvement progress of people over the last four decades will show that one of the major obstacles to economic, social and political progress in many developing countries is the insufficient attention given to the human dimension of progress. Haq analytic argument is the focal point of this paper as human development is a tool that can be used to measure the levels of development. When one analyses Haq’s writings (Haq et al., 1987: 22–28) and the World Bank’s World Development Reports there are clear indications that that central government expenditures on health and education have declined in low developing countries between 1980-83 and 1985-86 and in the same breath, human development has increased. Despite the increases in levels of income in many countries, why many peoples within developing countries lack the food necessary for an active, healthy life? (Haq et al., 1987: 29).

Therefore, the issue is can there be development without human development? According to Haq et al (1987: 33), “The first session of the Roundtable on Money and Finance in Istanbul in September 1983 declared that, solutions which do not take into the human resources building into account will fail to provide an enduring answer to the world’s financial and monetary crisis.” Not until human capital that is needed for substantial economic growth is developed, real developments will remain a dream. With those profound and analytical arguments forwarded by Haq et al (1987) and others, and the argument that Jamaica’s economic poverty has been reduced. Chambers (1989) concurred with the perspective forwarded when wrote, “The past quarter century has been a period of unprecedented change and progress in the developing world. Yet despite this impressive record, some 800 million individuals continue to be trapped in what I have termed absolute poverty: .. (p.1)” Mohammed concurred with the post-1950 scholars. She said, “It seems to me that the essence of development is the capacity of a society to provide gainful employment for its population, and to satisfy basic needs such as food, housing, education and health care for all its population” (Modammed, 2000). Those positions set the premise upon which this paper will seek to theorize a scientific justification for expenditure on social programmes as relationship exist between public expenditure on health and education and its impact on human development

The analytical arguments by Hag et al (1987) will set the pace by which theorists will seek to understand a relationship among public expenditure on health and education and its impact on human development using secondary data from the data set (Nations).

MAIN OBJECTIVE

· To examine the associative relationship between public expenditure on social programmes and the levels of development.

SPECIFIC OBJECTIVES

· To determine the associative relationship between public expenditures on educational and the levels of development;

· To examine the associative relationship between public expenditures on health and the levels of development.

LIMITATIONS

The fact we are analyzing data from an already collected source, this secondary data set (Nations Data Set), the relationships that exist statistically may be due to Type I error. This error may be due to the number of missing values in the data set, or a large sample size. In the case of the bivariate relationship between expenditure on education and development of the 174 countries within the sample only 114 of them recorded a valid response (i.e. 65.5 percent response rate). Statistically a non-response rate of 15 or more should not be used for analysis, but it was used for this paper. As it relates to total expenditure on health and development the valid cases response rate was (81.6 percent).

Chapter 2

LITERATURE REVIEW

The basic objective of development is to create an enabling environment for people to enjoy long, healthy and creative lives (UNDP, 1990: 9)

Development economics is the study of how human economic circumstances change overtime and how they can also be made to change (Hogendorn, 1987:1). This perspective by Hogendorn supports the traditionalists’ construct of development that it is primarily economic and that growth is the primary contribution towards development, which is limited to scope compared to the conceptual definition offered by the United Nations. Again the classical writers (Adam Smith and John Maynard Keynes) view development as the country’s ability to move forward in terms of building on certain assets it already has and to strengthen the capabilities it possessed. From the perspective of Marglin and Marglin (1990), the issue of development is fundamentally based on who defines the construct. They believe that this phenomenon is largely based on Western ideology. This is aptly summarized in these words that “…development means Westernization” (Marglin and Marglin, 1990: 2). The issue of development, therefore, is embedded in the expansion of choice. In order to grasp this issue, we must understand the components that are needed for holistic development. One scholar summarizes this aptly using Korea, when Lee said that

There have been numerous studies on how Korea has achieved its remarkable record of high and sustained economic growth.3 In these analyses a number of factors, including high savings and investment ratios, a well-educated labour force and well-directed export-oriented development strategies have been cited as primarily responsible for the Korean success. Despite the degree of international attention to Korea's fast economic growth, Korea's remarkable achievement in human development is little known.4 One of the most surprising characteristics of Korean development is that the nation has accumulated a stock of educated work-force at an unprecedented rate. (See Section III.) And although many studies have emphasized the role of Korea's highly educated human capital in economic growth, there has been little investigation into how Korea achieved this (Lee, 1993)

Development forces us to view critically the environments position especially on issues of pollution, deforestation and depletion of the Ozone layer and the emission of dangerous green house gases. Agenda 21 paragraph 27 states that poverty eradication should be an overriding theme for the coming years. Poverty could endanger the social fabric, undermine economic development and threaten political stability in many developing countries. However, the researcher believes that there cannot be a total eradication of poverty, but instead, the efforts of the world organization such as the World Health Organization (W.H.O.) and the United Nations could drastically minimize poverty.

There are arguments by advocates who believe that economic development should be emphasized more than sustainable development. The focus presently encompasses social, economic and political factors along with the ‘push’ for the human factor and the quality of life. One scholars aptly summarises this by saying that “development involves structural transformation with implies cultural, political, social and economic changes” (Hettne, 1990:3), which emphasizes the direct linkage between the economic and non-economic tenets of development and well-being, expansion in choices and socioeconomic and political modernization.

Prominent sociologist agree that the church, school and peer group influence socialization and political institutions especially those which embrace modernized education systems will certainly enhance or embrace human and social capital

(Harlambos et al., 1996). A group of economists concurred with the sociologists, when they found a negative association between education and human development (Ramirez, Ranie and Stewart, 1997:13). They carried out a study in fourteen African countries that revealed an inverse relationship between more female schooling and number of children had (Ramirez, Ranie and Stewart, 1997:12-14). This, they, saw as education influencing population growth, and economic growth. According to Ranie and Stewart (2001), healthier, better nourished, and more educated people contribute significantly more to economic growth than their otherwise counterparts. As they take use sick leave, report less absence from work, and are highly trainable, this affords more to production and productivity.

An educated nation is indeed a healthy one. Against this background, CARICOM has undertaken public education to raise the awareness to sustainable development. They have been a commitment to support educational awareness on sustainable development. CARICOM is also committed to provide specific training and educational activities including technical exchange programmes.

Spikes (2002) posits: “poverty can be regarded as the inability to obtain the essentials of life; for others it is a matter of low income; for others a problem of social inequality”. He goes on to say that “poverty can be explained in terms of material conditions, that is basic needs, food, clothing, and shelter; however limited resource interfere with the ability to acquire the essentials. Poverty can be seen as exclusion; the European Union defines the poor as persons whose resources (material culture and social) are so limited as to exclude them from the minimum acceptable way of life in the member state in which they live depending on benefits as equivalents as claiming social assistance”.

It is frightening to say the least that despite efforts within the technological age people living abject poverty that retards the process in which many of these issues should have been addressed. Haralambos (1995)”poverty implies an undesirable social problem that a solution should be found. Basic amenities, for examples, shelter health and nutrition: the latter according to Drewnowski and Scott in Haralambos “is measured by factors in relation to the amount of calories and protein consumed by the individual. Shelter is measured by the quality of living arrangements (dwelling etc.) and health is measured by factors such as infant mortality and the quality of medical treatments available.

Dalzell-Ward (1974:23), a medical practitioner, commented that, “The deprivation of energy foods will result in excessive fatigue which will in turn diminish social and work performance and interfere with well-being.” This position clearly indicates a level of development. In that, if an individual is unhealthy this will add to less hours worked and by extension a reduced production. According to Adam Smith, this would be an indication of reduced economic growth. According to Professor Todaro, development constitutes social, political and economic changes in peoples’ lives.

If an individual is malnourished, this will adversely affect the health of the person from which will result in mental underdevelopment, physical underdevelopment, lowered productivity, increase absenteeism, and reduce social and economic capital. Another medical practitioner concurred with Dalzell-Ward (1974), when she said:

In fact, many of today’s problems with students are actually health-related. Kids cannot learn if they are hungry, tired, hung over from alcohol, or worried about violence. We need to eliminate barriers that affect students’ readiness to learn. A variety of physical and mental conditions impact students’ attendance and their ability to pay attention in class anger, and restrain from self-destructive impulses (Dalzell-Ward, 1974)

Although Kristina’s (2004) position was argued from the perspective of children, the same analogy can be ascribed to adults. It is clear from a medical perspective that the health of an individual is critical to one’s existence. Therefore, health is a needed factor in development. Furthermore, if the individual is hungry then he/she is unable to learn which speaks to another obstacle to development. With the importance of education and health in peoples’ lives, this proposal seeks to unearth whether or not there is a significant relationship between those variables (that is, expenditure on health and education) and levels of development.

Adam Smith, founder of the classical school, believed that industrialization owes itself to the general nature of economic progress and particular causes of capitalistic development (The Keynesian Theory of Economic Development by Kurihara, 1959, p.13). He believed that development was possible through technological progress of capital and by laissez-faire system (the free market – “Individualistic Capitalism”). According to Kurihara (1959, p.14), “This proposition of Adam Smith anticipates Keynes’s retrospection that the slow rate of progress in the pre-capitalistic period was due to two retarding factors, namely, (a) ‘the remarkable absence of important technical improvements’ and ( ‘the failure of capital to accumulate.” Freidrich List (Kurihara, 1959, p.15) was another advocate of industrialization through “economic nationalism in general and through protectionism in particular.” Kurihara (1959: 15) wrote, “His theory of economic development still has a powerful appeal to present-day underdeveloped economies that are politically independent but economically dominated by advanced economies.” Based on Kurihara’s proposition of Freidrich’s perspective, development was influenced by political system, cultural change and by extension governance.

Karl Marx’s theorizing on economic development was interpreted within the construct of ‘economic interpretation of history’ and ‘the motivating forces of capitalistic development’. The latter perspective of Marx concurred with Adam Smith’s theorizing on development. Marx further his theorizing beyond that of Smith’s perspective when he that, “[Marx] ‘materialistic’ conceptual of historical evolution, according to which economic institutions, while they are products of social evolution, are themselves capable of influencing the course of social progress.” (Kurihara 1959: 19) Although Marx partially supported Smith’s theorizing on economic development, he ventures into non-economic explanations of development. He, however, had a casual and distant relationship with the sociological factors.

John Maynard Keynes (born 1883 and died 1946) advocates some of classical school’s perspective on development. Kurihara (1959) said that, “Keyness suggested that the future rate of economic progress would depend on (a) ‘our power to control population’, ( ‘our willingness to entrust to science the direction of those matters which are properly the concern of science,’(c) ‘our determination to avoid wars and civil dissensions’, (d) the rate of accumulation of fixed by the margin between production and our consumption.”(Kurihara, 1959: 19). Of the factors that Keyness did theorize, only one is economic. Based on Kurihara’s writings, ‘our power to control population’ is governance and political, ‘our determination to avoid wars’ is social, cultural and political, and as such indicates that economic progress is highly improbable without human, social political and cultural change and development.

Professor Sir Arthur Lewis, a Caribbean scholar and Noble laureate for his contribution to the economics profession, in ‘The Review of Black Political Economy (1989)’ reviewed by James B. Steward wrote that, “Racial Conflict and Economic Development presents deceptively incisive analyses of how race affects a variety of phenomenon including discrimination, colonialism, entrepreneurship, dual labour markets, and the international economic order.” Lewis’ theorizing was primarily economic and so he built his model within an economic construct. He failed just like the other Classical economists to divulge a position on cultural, social and psychological factors in regards development. Lewis a positivist was highly concerned with building scientific model. He used time series and descriptive statistics to provide the blocks upon which he derived his theorizing.

“Development economics is the study of how human economic circumstances change over time and how they can be made to change.” (Hogendorn, 1987:1). This perspective by Hogendorn supports the traditionalists’ position that development is solely economic. They argue that growth is the primary cause of development. Growth is broadly defined as an increase in output or income and the term development speaks to structural, institutional, and qualitative changes that expand a country’s capabilities. The mechanism used to measure this concept is gross national product. As such, the Classical economists (traditionalists) believe that growth can lead to development. They also suppose that development is not possible with growth. This position advocates that production is growth but infrastructural change is development. This idea supports pollution, deforestation, degradation, and depletion of the environment in support of development. Such a stance has given rise to various advocates of sustainable development as against economic development. With this new thrust, the scope of development encompasses the environment; social, economic and political factors in addition to the new emphasis on the quality of peoples’ live in the future.

King (2001) in Social and Economic Studies wrote that, “The budgetary allocations to the health sector also have implications for social equity.” It is clear from Dr. King’s postulation that government spending on health care influences the quality of life of peoples within a country. This determinant of the quality of life is not limited to health but spans education, defence, political system and governance. King (2001) forwarded that position that, “One fifth of the education [Jamaica] budget is being used on tertiary education, which does not benefit the lowest quintile.” Although King’s finding was as stated, the actuality is that the quality of life of peoples who attain tertiary educational institutions and by extension the society benefits there from. It appears that Dr. King is incognizant of the multiplier effect of single dollar spent on educating one university graduate. Milton Freidman (1955) in an article titled The Role of Government in Education posited that:

A stable and democratic society is impossible without widespread acceptance of some common set of values and without a minimum degree of literacy and knowledge on the part of most citizens. Education contributes to both. In consequence, the gain from the education of a child accrues not only to the child or to his parents but to other members of the society; the education of my child contributes to other people's welfare by promoting a stable and democratic society. Yet it is not feasible to identify the particular individuals (or families) benefited or the money value of the benefit and so to charge for the services rendered. There is therefore a significant "neighborhood effect (Friedman 1955)

Friedman’s (1955) position, therefore, contradicts Dr. King’s (2001) stance. If democracy is highly improbable with a minimum degree of literacy, then public spending on education in and of itself is a factor of improvements in the quality of peoples’ lives. This position concurs with noble prizewinner Professor Michael Todaro’s (200) three (3) objectives of development. Dr. Friedman in his article “The Role of Government in Education” argued that the value of educating a child does not end with the individual but extends to the society a factor Dr. King failed to “ingredientized” in his position forwarded earlier. One may argue that Friedman’s theorizing was in the 1950s and that this is phenomenon is obsolete but Lee notes that this still explain 21^st century societies, for example that of Korea. Lee says that

During the period from 1945 to 1961, before the economic boom, the available data indicate that Korea substantially expanded education. As Table 2 shows, school enrolments at all levels increased extremely rapidly from 1945 to 1965, except during the period of the Korean War (Lee, 1993)

Professor Todaro credited Adam Smith for being the first development economists (Michael Todaro, 2000). He wrote that, “his Wealth of Nations [Adam Smith], published in 1776, was the first treatise on economic development, the systematic study of the problems and processes of economic development in Africa, Asia, and Latin America.” Although Friedman lauded Smith for his pioneer work he cited that “I disagree with this viewpoint” (Todaro, 2000: p. 7). He [Todaro], although an economist, believed that development spans a plethora of other factors beyond the traditionalists view on the subject. The distinguished modern economist cited that, “there are non-economic variables, values, attitudes and institutions” (Todaro, 2000: pp. 13). It is this perspective that will forge shift away from the economic stance of development to a sociological perspective.

According to Musgrave (1970) who edited ‘A Model for the Analysis of the Development of the English Educational System from 1860’ by P. W. Musgrave wrote, ‘The development of the educational system of a country is one specific but central example of social change’. If educational system is a mechanism of ‘social change’, then spending thereon must increase of quality of the human capital to society. A change in the social position of an individual, will transform the individual’s social status – development. It is through the educational system that a society transforms itself. This socio-political transformation is a change in the degree of development of this society. Professor Munroe (2000) in “Introduction to Politics” forwarded the position that democracy and governance are critical indicators of development of a society. Dr. Orville Taylor, a sociologist, argued that social institutions are yardsticks in measuring the development of a society. Therefore, both distinguished academics have forwarded positions that clearly indicate that development goes beyond the traditional definition of development. Professor Todaro in “Economic Development” (Todaro, 2000: 1-2) outlined this position.

Sociologists agree that school, church, peer group influence socialization and political institution, therefore, any modernization of the education system will enhance an improvement in the human and social capital (Haralambos et al., 1996). Education is a process of transformation and so although it may not be cost in regards to its benefits to the recipient, any value added to individual by this process therefore modernized society. This modernization is referred to as development (Munoz, 1981:1). Munoz (1981) wrote that, “The end of World War II marked the beginning of fundamental transformations in world affairs. The defeat of the Axis powers and the devastating toll which the war had exacted on Britain and the European allies propelled the United States into a position of economic and military preeminence.” Munoz’s arguments concur with Todaro’s stance and further strengthen the position that development is multifaceted. Based Munoz’s writings, political education, political transformation and social change are ingredients in development.

Although Dr. King’s (2001) findings revealed a particular position and it appears that his position does not support investment in tertiary education, Dr. Milton Friedman’s (1955) postulation clearly showed that there are benefits to be had from investment in education. This investment in educating a populace transforms the peoples’ social position. Lee notes that

Any improvement in the social position of peoples’ lives influence the quality of their lives. In order to emphasis the limitedness of traditionalists approach to development, a quotation from Hogendorn will be used that summarizes that scope. According to Hogendorn (1987), “The standard measures of output and income are gross national product (GNP), gross domestic product (GDP), and national income. These tools are universally used. However, there are problems with measuring output and income. Even greater difficulties beset the employment of these tools to measure well-being or satisfaction or the standard of living or to judge the “progress” of different countries.” It follows therefore that political system and governance must affect of the quality of peoples’ existence. In that, a particular political system may contract the quality of peoples’ lives. The examples here are political system in Haiti. This system often times curtails education, health care and democracy that are components of development.

Rasheed (1998) in “development” wrote, “Generating and sustaining high growth rates, eradicating poverty and promoting human development require deliberate far-reaching transformations that go well beyond the standard economic reform measure. “ This position is shared by Professor of development economic Michael Todaro. He (latter) argued that although economic progress is significant for development, development also relies on political system, social characteristics, governance, integration, investing in human development and boosting self-reliance. Although Todaro is a development economist and Rasheed a developmentalist, they converge on new approach to development as against the Classical economists (including the founder of development theory, Adam Smith). In reference to Rasheed’s position, development is simply not a simple one variable linear model (the one variable being, economic growth) but a multiple regression model of many components include human social development. When one reads Rasheed’s theorizing it may be understood that this is limited to Africa but the same was said by Todaro an American, and as supported by other nationalists in this paper. From a Caribbean perspective, Dr. Marie Freckleton et al (1993) wrote, “development strategies for the 1980s [included] accelerating programmes for the development of human resources in every relevant field.”

“We shall take by way of illustration here probably the most influential model, propounded by Walt Rostow (1962). In it emphasis on the psycho-cultural prerequisites of development . . .” (Vicky Randall et al 1998: pp. 24). Rostow’s theorizing, Modernization Theory, is a clear position that development is primarily not economic but multi-faceted, and that it includes psychological as well as cultural factors as ingredients

Although Rostow’s theorizing clearly showed “sociological thinking”, modernization theory showed the stages through which an economic travels before development is possible. Those stages are indicators of processes of development, and they do not form a linear model as purported by Adam Smith and other Classical Theorists. The classical school’s theorizing can be contrasted with contemporary developmentalists’ perspective on the issue of development. John Toye (1987) a contemporary developmentalist wrote that, “It is important not to confuse economic growth, the expansion of the measured output of goods and services, with development.” He continued that, “For example, output can be produced by the severe exploitation of labour – the payment of mere subsistence wages, bad health and safety conditions and the unfair treatment of workers – with the resulting profits being channeled to private bank accounts in foreign tax havens.” The perspective forwarded by developmentalists is wider in scope of the subject matter than forwarded by classicalists or neo-classicalists. This is so because subsistent living, poor health and unsafe environmental conditions may result in economic growth.

The various theorizing and past research findings are sole reason why this paper is forwarded a perspective that human development is directly related to levels of development. In order to ascertain whether development’s scope is beyond economic development, the researcher will use public expenditure on health and education and other variables with the human development index to establish causality. The researcher chose not to use GDP or GNP as theorizing has indicated that they are unable to adequate measure welfare. Development, therefore, whether economic or sustainable is a continuing process. The success, which is noticeable, depends on the assistance given to developing countries by the developed counties and the ability of the developing counties the said resources.

Chapter 3

METHODS

This research, “an investigation of expenditure on social programmes and there influence on levels of development” is primarily seeking to establish relationships between expenditure on health and education and levels of development by way of the analysis of secondary data method. From this standpoint, the objective of the researcher is to provide internal validity of the study, which, will rely totally on the scientific methods, precise measurement, value free sociology and impersonality.

The study will design its approach similar to that of the natural science by using logical empiricism. This will be done by precise measurement through statistics (Pearson Correlation). By using hypotheses testing, value free sociology, logical empiricism, cause-and-effect relationships, precise measurement through the use of statistics and survey and deductive logical with precise observation, this study could not have used the interpretivists’ paradigm. As the latter seeks to understand, how people within their social setting construct meaning in their natural setting which is subjective rather than the position taken in this research – an objective stance. Conversely, this study does not intend to transform peoples’ social reality by way of empowerment but is primarily concerned with unearthing a truth that is out there and as such, that was the reason for the non-selection of the Critical Social Scientist paradigm.

EXPLANATORY MODEL

Figure 1: An explanatory model of the dependent and the independent variables

Public Expenditure on Education

Human Development

Public Expenditure on

Health

Hypotheses:

General hypothesis –

H_o: There is no statistical relationship between expenditure on social programmes (public expenditure) and levels of development in a country; and

H₁: There is a statistical association between expenditure on social programmes (publice expenditure) and levels of development in a country

Specific hypotheses:

H_o: There is no statistical relationship between public expenditure on health and levels of development in a country;

H₁: There is a statistical association between public expenditure on health and levels of development in a country;

H_o: There is no statistical relationship between public expenditure on education and levels of development in a country; and

H₂: There is a statistical association between public expenditure on and levels of development in a country

Conceptualization

EXPENDITURE on HEALTH

WHO defines health as the “state of complete physical, mental and social wellbeing of an individual?” The document goes on to show that it not merely the absence of disease and infirmity; rather it is a state of being.

EXPENDITURE on EDUCATION

Education can be defined as a combination of activities aimed at imparting instruction to another through instruction, teaching, and pedagogy and in activities. In this paper, emphasis will be placed primarily on pedagogy

LEVELS OF DEVELOPMENT

In this study, the Human Development Index (HDI) will be the primary variable. The HDI measures human development in three dimensions. Life expectancy at birth looks to the health related development; while knowledge measures by the adult literacy rate deals with the educational aspect. The standard of living of the country looks to the economic development of the country.

“Development has been treated by economists as if it were nothing more than an exercise in applied economics, unrelated to political ideas, forms of government, and the role of people in society. It is high time we combine political and economic theory to consider not just ways in which societies can become more productive but the quality of the societies which are supposed to become more productive-the development of people rather than the development of things” (Professor of Development Economics: Michael P. Todaro, 2000).

This paper seeks to follow in the steps of Todaro and examine development as the degree of change in the political system, forms of governance, economic development and quality of life of people in a society.

QUALITY OF LIFE OF PEOPLE

Quality of life is the most fleeting of the terms used in the paper. Not a quantitative variable by any standard, this reflects the emotive side to development that is so often left out of the equation. This is to keep in mind that it is people who live in the space.

Operationalization

EXPENDITURE on HEALTH

Used in the research, this variable is to be measured based on the sum of expenditure public expenditure on health (see Nations Data Set, pubhealth). The level of measurement of this variable is ratio as it is a percent of the Gross National Product.

EXPENDITURE on EDUCATION

This item is to be measured as public expenditure on education (see Nations Data Set, pubeduca). The level of measurement of this variable is ratio as it is a percent of the Gross National Product

LEVELS OF DEVELOPMENT

QUALITY OF LIFE

This measure will be tabulated using human development and the physical quality of life index

Population

The Nation Data Set comprises a number of secondary data sources. The final data set was a merged file of related issues on development. The said data set is a compilation of data on 174 countries

Analysis plan

The Statistical Packages for the Social Sciences (SPSS) was used to analyze the data. Cross tabulations was be used to ascertain the relationship between the dependent and the independent variables. The method of analyses was Pearson’s correlation testing that determine if any relationship existed between the variables. Contingency coefficient was be used to determine the strength of any relationship that may exist between variables. The level of significance used is alpha=0.05, at the 95 percent confidence level (CI).

Chapter 4

ANALYSES AND INTERPRETATION OF DATA

Univariate Analyses

Table 4.1: Descriptive Total Expenditure on Public Health (as percentage of GNP HRD, 1994)

	TOTAL EXPENDITURE on PUBLIC HEALTH as percentage of GNP (HRD, 1994)
Mean	4.6140
Standard deviation	2.1489
Skew ness	0.9860
Minimum	0.8000
Maximum	13.3000

From table 1.1, the data is trending towards normalcy, as the skewed ness is 0.9860 and so is a good statistical measure of this population sampled (see figure 1.2 below). It will therefore be assumed that the data is not skewed. The mean of 4.614 shows that approximately 4.614 per cent of the Gross National Production (GNP) is spent on public health with a standard deviation of 2.1489.

Figure 4.1

Table 4.2: Descriptive statistics of Expenditure on Public Education (as percentage of GNP, HRD, 1994)

	PUBLIC EXPENDITURE on PUBLIC EDUCATION as percentage of GNP (HRD, 1994)
Mean	4.5340
Standard deviation	1.9058
Skewness	0.1340
Minimum	0.0000
Maximum	10.600

It can be concluded from the data collected and presented in the table above that the data is relatively normally distributed (see Figure 4.2)and therefore is a good measure of the data the sample population. The mean of 4.534 is an indication that approximately of 4.534 per cent of the Gross National Production (GNP) is spent on public education with a standard deviation of 1.9058.

Figure 4.2:

Table 4.3: Descriptive statistics of Human Development (proxy for development)

	HUMAN DEVELOPMENT INDEX
Mean	2.0700
Standard deviation	0.7820
Skewness	-0.1180
Minimum	1.000
Maximum	3.000

The mean of the data 2.07, with a skewedness of -0.118 shows that the data is representative of the population of countries surveyed. Most countries are within the middle development stage with a standard deviation of 0.7820.

Figure 4.3

BIVARIATE ANALYSES

Table 4.4: Bivariate relationships between dependent and independent variables
		PUBLIC EXPENDITURE ON EDUCATION AS PERCENTAGE OF GNP (HDR 1994)	HUMAN DEVELOPMENT INDEX: 0 = LOWEST HUMAN DEVELOPMENT, 1 = HIGHEST HUMAN DEVELOPMENT (HDR, 1997)	1990: TOTAL EXPENDITURE ON HEALTH AS PERCENTAGE OF GDP (HDR 1994)
PUBLIC EXPENDITURE ON EDUCATION AS PERCENTAGE OF GNP (HDR 1994)	Pearson Correlation	1	.413(**)	.435(**)
	Sig. (2-tailed)	.	.000	.000
	N	115	114	106
HUMAN DEVELOPMENT INDEX: 0 = LOWEST HUMAN DEVELOPMENT, 1 = HIGHEST HUMAN DEVELOPMENT (HDR, 1997)	Pearson Correlation	.413(**)	1	.395(**)
	Sig. (2-tailed)	.000	.	.000
	N	114	165	142
1990: TOTAL EXPENDITURE ON HEALTH AS PERCENTAGE OF GDP (HDR 1994)	Pearson Correlation	.435(**)	.395(**)	1
	Sig. (2-tailed)	.000	.000	.
	N	106	142	145
** Correlation is significant at the 0.01 level (2-tailed).

Bivariate relationship between public expenditure on education and human development

From Table 1.4, the results indicated that there was a statistical relationship between public expenditure on education as a percentage of GNP and levels of human development based on the population sampled. The strength of the relationship is moderate (cc = 0.413 or 41.3 %) and this indicated that there is a positive relationship public expenditure on education as a percentage of GNP and human development.

The coefficient of determination indicates that public expenditure on education as a percentage of GNP explains approximately 17.06 percent of the variation in levels of human development of the population sampled. A significant portion of the countries surveyed (82.94%) is not explained in terms of its expenditure on education.

Bivariate relationship between total expenditure on health and human development

From Table 1.4, the results indicate that there was a statistical relationship between total expenditure on health as a percentage of GDP and levels of human development. The strength of the relationship is moderate which shows that there is a positive relationship total expenditure on health as a percentage of GDP and human development. The coefficient of determination indicates that total expenditure on health as a percentage of GNP explains approximately 15.68 per cent of the proportion of variation in levels of human development of the population sampled. The unexplained variation of 84.32% which indicates that although total expenditure on health explains a particular percent of the variation in development, a significantly larger percent of that variation is not explained by total expenditure on health.

TABLE 4.5: SUMMARY OF HYPOTHESES ANALYSIS

VARIABLES COUNT (P_value)

Rejected Null Hypotheses (i.e. rejected H_o):

TOTAL EXPENDITURE ON HEALTH AND HUMAN DEVELOPMENT 114 (0.001)

PUBLIC EXPENDITURE ON HEALTH AND HUMAN DEVELOPMENT 142 (0.001)

Chapter 5

DISCUSSION AND CONCLUSION

Many persons inadvertently and incorrectly interchange economic growth and economic development as though they are one and the same. Economists posit that ‘economic growth’ is an increase in the Gross Domestic Product (GDP) of a nation.[4] GDP is the aggregate of all goods that are produced, distributed and consumed in an economy in a given year.[5] As such, an increase entails the employment of more factors of production (land, labour, capital and entrepreneurship). Equally, G.D.P is the aggregate of the factor incomes. Apart from the definitional properties of G.D.P, the reader must understand a thorough understanding of this measurement of production in order that s/he is able to grasp the issues that will be critically presented in this paper.

GDP’s Growth does not automatically disaggregate into a share of production to each sector within the economy. The growth of the economy may entail all sectors getting proportionately more or proportionately less than other sectors. It has been the case on a wide scale that the owners of capital, the entrepreneurs, have been receiving significantly more of the GDP than the other participants. It is this disparity between the wage earners and the owners of capital that must be addressed in order to develop the human capital of the population as a whole. This is especially the case when capital is very unequally distributed. An increase in productive capacity of an economy may not have been for the general good of all peoples therein but may be due largely to small sub-sector of the populace.

Economic development, however, is significantly different from that of economic growth. In that, “Development in human society is a many sided process. At the level of the individual it implies increase in skill and capacity ………… and material well being”.[6] Implicit in that definition is the accumulation of the surplus of individual firms. In order for this surplus to be meaningful as a human indicator of development and large enough to ensure the survival of firms and improve the standard of living of those employed by the firm, the surplus cannot be consumed after a day. If this is done, then the standard of living of the workforce will decline and this decline is concomitant with the lack of development in the domestic economy.

On the other hand, the Modern Economists believe that development is broader than economic growth. Professor Michael Todaro purported that there are three (3) objectives of development. Firstly, they are “increase the availability and widen the distribution of basic life – such as food, shelter, health, and protection. Secondly, to raise the levels of living, including, in addition to higher incomes, the better jobs, better education, and greater attention to cultural and humanistic values, all of which will serve not only to enhance material well-being also to generate greater individual and national self-esteem. Finally, he purported the expansion of social choices.” Based on Professor Todaro’s position on development, this includes the improvement in the quality of life of people through social, political and economic determinants.

Todaro and other researchers clearly show that development is influenced by social, economic, political factors and quality of governance within a country. In researching this social discourse, I opted to investigate two social factors within public expenditure on social programme because of time and deadline constraints. These were selected in recognition of their singular importance in the process of development. The two (2) factors were total expenditure on education as percentage of Gross Domestic Product (GDP) and public expenditure on education as percentage of Gross National Product (GNP), and their impact on levels of development. The findings from the Nations Data Set showed that the relationship alluded to by Todaro were in fact present.

The Classicist point of view is of the view that economic factors positively influence development. This was not studied in the paper because this is a one-dimensional space to the study of a multidimensional discourse. The view of the Classicists is not accepted for the purpose of this paper as, if one were to accept the Classicalists viewpoint that development is primary influenced by economic factors then there would be no relationship between socio-political factors and levels of development. This research proves that there is such a relationship.

Hagen (1980, pp.9) stated that, “economic development is used, more technically, to refer to all the complex effects of growth, planned or unplanned, beneficial, detrimental, or neutral: to changes in the kinds of goods produced, the methods of producing them, and employment patterns, in the rate of population growth, foreign trade, urbanization, and so on; and in the distribution of material welfare.” Based on the perspective of Hagen the factors of development were economic, social and implied therein was governance. This position was also richly argued and agreed upon by Professor Michael Todaro (2000) among other developmentalists. To strengthen his point Hagen (1980) cited that, “affluence certainly does not ensure happiness”. Within this argument lies the non acceptance that development goes far beyond economic resources and includes governance, leisure, civil liberties, quality education, and quality health care and so on. Although Hagen was economist, he knew that development had to encompass all aspect of man’s life in order to attain ‘real’ development. Otherwise, development would be one-dimensional. Many economists including Hagen believed that the ‘Gini ratio’ is a single measure of development. That measure they argue is on the side of economic growth as it looks at “inequality of income distribution of the national income [a population receives].”

Professor Sir Arthur Lewis in reviewed by James B. Steward wrote that, “Racial Conflict and Economic Development presents deceptively incisive analyses of how race affects a variety of phenomenon including discrimination, colonialism, entrepreneurship, dual labour markets, and the international economic order.” Lewis’ theorizing was primarily economic and so he built his model within an economic construct. He failed just like the other Classical economists to divulge a position on cultural, social and psychological factors in regards development. Lewis a positivist was highly concerned with building scientific model. He used time series and descriptive statistics to provide the blocks upon which he derived his theorizing.

It has been shown that there is a strong positive relationship between the two social factors and levels of development. This falls in line with Freidman’s perspective that expenditure on education impacts on development. Though only 17.06 per cent of the variation in development is explained by public expenditure, it is enough to add value to Friedman’s perspective that public expenditure on education is strongly related to levels of development.

Dalzell-Ward (1974:23), a medical practitioner, commented that, “The deprivation of energy foods will result in excessive fatigue which will in turn diminish social and work performance and interfere with well-being.” This position clearly indicates a level of development. In that, if an individual is unhealthy this will add to less hours worked and by extension a reduced production. According to Adam Smith, this would be an indication of reduced economic growth. From the perspective of Professor Todaro, development envelopes social, political and economic changes in peoples lives.

It can be argued that an increase in the level of public spending on education will significantly influence development of any country. The reverse is true, in if a small portion of a country’s GNP that is expended on education, the lower the level of development of that state. The variations of 82 per cent are more explained by combined other factors as against expenditure on education. It should be reiterated that, public expenditure on education strongly affects levels of development and may be larger than the combined factors disaggregated.

Since this research showed that, there is strong positive relationship between total expenditure on health and levels of development, this concurs with Todaro’s (2000) perspective on development. The P_valueof 0.000 shows that none of the sampled observation is explained by chance. The finding of this research agrees with Todaro, that development is influenced by social factors to which this research upholds. From a more specific viewpoint, public expenditure on education and the total expenditure on health as social factors based on this research do not by chance explain development but does statistically explain changes in levels of development of a state.

Dossier (2002, p.4), Head of the EC Delegation in Jamaica, cites that a “health population is necessary to economic growth and sustainable development”; this perspective subsumed the value of expenditure on this determinant of development. A few people recognize the contribution of health to development, which indicates the worth they place on the human capital in the function of development. “Good governance is necessary if policy is to meet needs and expectations (Dossier, 2002, p.4), which places significance on government’s involvement in the process but this does not dwindle a holistic partnership between the former and the private sector in an effort concretize a development goal. Increasing demands of people on government, and the continuous deterioration of the economic base of developing countries, the private sector needs to forward a systematic move that will address some the inadequacies of the government.

One of the ‘Millennium Development Goal of halving the number of people living in extreme poverty in 2015’ is “to combat the spread of communicable diseases and increase investment in health care” (Dossier, 2002, p.4), and this should be noted that those words were spoken by an external agency. Despite the intentions of external developmental agencies a limited action of developing countries’ governments, governance in those topologies lacks social development focus. Social development does not only benefit the recipient but the society and the private sector hence, improvement in the quality of health care will not only advance better lives for the people but profitability of private companies. With the increasing spread of HIV/AIDS, malaria and other major diseases, more people will be request time off, this will translate into reduced production times and so production will be adversely affected. Therefore, access to excellence health care is an advantage for the business hegemony and the ‘laboured’ class.

The involvement of the private sector in health care is to be a policy responsibility, which again is a vital determinant for development. This body of professionals and pundits will use a different technique in responding and demand better governance for all. The government’s ill actions highlight the rationale for private sector governance in public sector management as these directly affect their entities. One write cost is yet another factor discouraging utilization of mental health services. Minorities are less likely than hegemonic class to have private health insurance and other provisions, and this factor has a miniscule influence on ‘quality’ health even though the ‘laboured’ class is confronted with other pressing needs.

The private sector has been private concerning the dictates of governance in developing economies but any continuation of this doctrine will only further cripple their potential and capacity, and longevity. With the economic realities of Third World countries, private entrepreneurs if they fail to forge a plan of action for social development, deviance form the ‘laboured’ class may become their worst foe. Studies have shown that unhealthy workers provide an additional cost and this erodes company’s profitability unless the entity is able to pass on those costs to the consumer. Globalization and liberalization with the context of international competition is a reality that Third World entities are to discount in their decision-making policy, and this will limit the extend to which they are able to increase product costing. Hence, companies are to be cognizant their involvement in social capacity building, and one that is vital for their personal development is health expenditure.

PIOJ (1995, p.29) in its ‘National Plan of Action: On population and development’ summarizes an aspect of Jamaica’s health situation when they pen the words that “Moreover, segments of our population continue to lack access to clean water and sanitation facilities, are forced to live in congested conditions and lack adequate institution.” This reality is becoming increasingly burdensome to the ‘laboured’ class, while they observed the bourgeoisie class with bitterness and much hate. The ‘laboured’ class is the ‘work’ horses for countless private businesses and so the latter group must contextualize this when profits are reported and lifestyles are displayed. The proletariats progressively have to accept ‘poor’ health facilities and other social conditions coupled with the inept autocratic governance of the political administrators, this impact on the people’s conceptualization of their social world and may form an epistemology that this anti the social order.

Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the type of diet, participate in the activities and have the living conditions and amenities which are customary, or at least widely encouraged or approved, in the societies to which they belong. Their resources are so seriously below those commanded by the average individual or family that they are in effect, excluded from ordinary living patterns, customs and activities (Townsend 1979: 31)

Townsend’s outlook was a synthesis of Jamaican poor and their socio-economic realities. Prior to the SAP in the 1980s, when many people in Jamaica were below the poverty line, now (post 1980s); the situation has even worsen significantly to the position where many people are merely living, and may be termed as subsistence existence.

Todaro (2000) encapsulates the entire discourse on development in a succinct sentence that reads:

… development economics, to a greater extent than traditional neoclassical economics or even political economy, must be concerned with the economic, cultural, and political requirements for effecting rapid structural and institutional transformations of entire societies in a manner that will most efficiently bring the fruits of economic progress to the broadest segments of their populations (Todaro, 2000:8)

From the widen conceptual definition of development offered by the United Nation (i.e. human development instead of economic development), people will only be able to expand their choices if they are provide with better cultural, social, economic, and political conditions. Despite the potency of GDP as a measure of development, this construct captures only the production of goods and services which are offered to the market. Many Third World economies thrive on an informal sector, which means that the formal sector would not have included their operations in the computation of development. From the vantage point of peoples’ perspective, there are myriad of positions on development. Hence, real development (‘working definition or core perspective on its meaning’ – Todaro 2000, 13) must be redefined within the context of applied theory in order to understand more effective ways of planning for the citizens’ welfare. Development theory, therefore, must address the primal issues of enlargement of peoples’ choice who reside in developing countries. At the core of this new thrust is the phenomenon’s constitution; development must be defined wider than GNP growth to include socio-cultural, political and economic conditions.

According to Todaro, “Most economists argue that it is the human resource of a nation, not its physical capital or its natural resources, that ultimately determine the character and pace of its economic and social development (Todaro, 2000: 326), which symbolizes the importance of high quality human capital. Education is a vehicle of human change, it allows for the modernization of existing resources in a more efficient and highly productive manner. This is within a context that the educated labour will increase an area’s per capita economic output as capital goods (machines, equipment, et cetera) require the input of human capital to transform it into final goods. It should be noted that quality human capital is not reached with only education, but the issue of a healthy body makes for a productive body.

The conclusion of this project, therefore, is that development can be explained by social factors, despite the claims of classicalists (or neoclassicalists) and/or Keynesian (post-Keynesian) economists. Based on the results of the survey, development relies on education and health. This, then, justifies a rationale for public expenditures on health and education as they aid social, economic, political and cultural choices (i.e. development). The Korean economy (see Lee 1993) epitomizes how the advancement of human capital accounts for growth and/or development. Lee summarizes this ideally in this sentence that reads:

First of all, human capital is considered one of the major factors in explaining Korea's remarkable economic growth. The contribution of human capital to growth goes beyond that indicated by conventional growth accounting because the abundant well-educated human resources have been playing a key role in the absorption of advanced technology from developed countries and thereby bringing about Korea's high levels of technological progress (Lee 1993)

It follows from the literature that development is multi-dimensional, and so at the core of this phenomenon is the human capital, which is transformed through education and enhanced by health status.

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[2] See Beardshaw, John. Economics: A Students Guide. (Pitman Publishers 1992), p. 84

[3] See Rodney Walter. How Europe Underdeveloped Africa. (Howard University Press. 1874), p.3

[4] See Beardshaw, John. Economics: A Students Guide. (Pitman Publishers 1992), p. 699

[5] See Beardshaw, John. Economics: A Students Guide. (Pitman Publishers 1992), p. 84

[6] See Rodney, Walter. How Europe Underdeveloped Africa. (Howard University Press. 1974), p.3

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