Human Development Research Papers
Thematic research on key issues and concepts of human
and Convergences in Human Development
I conduct a cross-country analysis of the human development index (HDI) components, income,
life expectancy, literacy and gross enrolment ratios, using Gray and Purser’s 1970-2005
quinquennial database for 111 countries.
1) A descriptive analysis uncovers a complex pattern of
divergence and convergence for these components’ evolution. Development is not a smooth
process but consists of a series of superposed transitions each taking off with increasing
divergence and then converging.
2) Absolute divergence/convergence for the HDI components is
decomposed using simultaneous growth regressions including a full set of quadratic interactions
between the HDI components, and indicators of urbanization, trade, institutions, foreign direct
investment and physical geography. These are implemented, first, using three stage least squares,
all of the non-exogenous independent variables fully instrumented, and second, as independent
regressions with errors clustered by countries, again all non-exogenous variables instrumented.
3) A set of quantile regressions is run for the HDI component levels on the same variables (just
the linear terms), again fully instrumented.
Urbanization is a leading significant variable for
human development indicators in both sets of estimates, stronger than trade, FDI and
institutional indicators. These indicators act with ambiguous signs that may result from their
distributive impacts, reducing their effectiveness.
The results indicate that improving markets
will have smaller returns than complementing them with institutions that can coordinate
urbanization as well as investment in human capital. Urbanization itself can provide a concrete
agenda for development involving all aspects of economic, political and social life as well as