Economic growth and human development

The connections between economic growth (EG) and human development (HD) form two chains. Crosscountry regressions show a significant relationship in both directions, with public expenditures on health and education, notably female, especially important in the chain from EG to HD; and the investment rate and income distribution significant in the HD to EG chain. This gives rise to virtuous or vicious cycles, with good or bad performance on HD and EG reinforcing each other. Evidence over time has strong sequencing implications: countries initially favoring economic growth lapse into the vicious category, while those with good HD and poor EG sometimes move into the virtuous category. Where choice is necessary human development should be given sequencing priority. (C) 2000 Elsevier Science Ltd. All rights reserved.