Multiple Dimensions of Human Development Index and Public Social Spending for Sustainable Development

IMF Working Papers, September 26, 2019

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Multidimensional assessment of human development focused on the three HDI dimensions: standard of living, education, and health.
Analyze the relationship between public social spending and HDI indicators in the context of achieving the 2030 Agenda for Sustainable Development.
Study estimates effects of public social spending on:
- gross national income (GNI) per capita (in PPP in $)
- expected years of schooling
- life expectancy
Sample: 68 countries.

Econometric analysis estimating the effects of public social spending on the three HDI indicators.
Relationship tested for robustness by controlling for a variety of factors.
Subjects and techniques listed: Econometric analysis, Education, Expenditure, Health, Health care spending, Logit models; keywords include lagged dependent variable, effects OLS, explanatory variable.

The estimated magnitudes suggest a positive long-run effect of:
- public educational spending on GNI per capita
- public educational spending on expected years of schooling
- public health expenditures on life expectancy
The relationships are robust to controlling for a variety of factors.

Public social spending—particularly public educational spending and public health expenditures—can play a positive role in improving HDI dimensions over the long run.
Findings are relevant for policy design aimed at delivering the 2030 Agenda for Sustainable Development through targeted public social spending.