Health and wealth

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: Jeffrey Sachs, a development economist, writes in his book “The End of Poverty” of a telling phrase by Gro Harlem Brundtland, then the director-general of the World Health Organisation (WHO): “If you want to get someone’s attention about the health crises in Africa, ‘show them the money’.” This is something that governments and international agencies have long known: emphasising that an idea is good for economic growth makes it easier to sell. The WHO has used the argument to press for more investment in health.

The link between health and income seems pretty uncontroversial. Healthy people can work longer and harder than sick people. Healthier children are likely to stay in school longer and learn more, earning more when they enter the workforce. Even across countries the relationship seems clear: those with better health are generally richer, and those that improve their citizens’ health grow faster. So the conclusions of two recent papers that improving life expectancy at birth (a common indicator of better health) can depress income per head for as long as two generations may come as a shock.

Correlation or causation?

Daron Acemoglu and Simon Johnson, both of the Massachusetts Institute of Technology (Mr Johnson is a former chief economist of the IMF), are sceptical* about the notion that healthier countries are richer, because it is not clear where the causality lies: countries with higher incomes may simply spend more on health. To investigate, they needed to study health improvements that were not driven by economic growth in the countries concerned. The expansion of the international public-health system after 1940, the researchers found, fitted the bill.

Beginning in the 1940s, several medical innovations involving penicillin, streptomycin and DDT made it easier to treat diseases—such as tuberculosis, malaria and yellow fever—that disproportionately affected people in developing countries. Because these ideas originated in the rich world and were spread by organisations such as the WHO, any improvements in health they led to would have been unconnected with prior improvements in the economic circumstances of poor countries. This international revolution in public health did lead to substantial increases in life expectancy in poor countries by the 1950s. However, the researchers found that income per head actually declined when life expectancy went up and did not recover for up to an astonishing 60 years.