The Scorecard on Development 25 Years of Diminished Progress Authors Mark Weisbrot Dean Baker and David Rosnick September 2005 Center for Economic and Policy Research 1611 Connecticut Avenue NW Suite 400 Washington D C 20009 Tel 202 293 5380 Fax 202 588 1356 www cepr net ii Contents Title Page i Table of Contents ii Executive Summary 1 Introduction 3 Standards of Comparison 5 The Slowdown in Economic Growth 7 Reduced Progress in Heath Outcomes 9 Reduced Progress in Education 15 Exceptions China and India 21 Conclusion What Went Wrong 24 About the Authors Mark Weisbrot and Dean Baker are Co Directors and David Rosnick is a Senior Research Associate at the Center for Economic and Policy Research Acknowledgments Egor Kraev Luis Sandoval Dan Beeton Ji Hee Kim Jamie Strawbridge and Nihar Bhatt provided research assistance for this paper The Scorecard on Development 1 Executive Summary This paper looks at the available data on economic The middle quintile with GDP per capita between 2364 and 4031 drops from a 2 6 percent growth rate in the first period to 1 percent in the second The second quintile 4086 8977 falls even further from 3 1 percent in the first period to 1 3 percent in the second period growth and various social indicators including health outcomes and education and compares the last 25 years 1980 2005 1 with the prior two decades 1960 1980 The paper finds that contrary to popular belief the past 25 years 1980 2005 have seen a sharply slower rate of economic growth and reduced progress on social indicators for the vast majority of low and middle income countries Countries are divided into quintiles on the basis of their starting point at the beginning of each period The study therefore does not compare the performance of the same country over the two periods because this would tend to find reduced progress for the second period due to diminishing returns In other words it would be more difficult for a country to move from a life expectancy of 70 to 75 than from 50 to 55 By comparing the performance of countries that start out at a certain level in 1960 with countries that start out at the same level in 1980 this study avoids the possibility of interpreting such inherent limits on progress as evidence of failure in the second period Among the findings 1 A sharp fall off in the growth of GDP per capita was found for all groups of countries except the bottom quintile See Figure 1 In the fourth quintile marked by per capita incomes between 1238 and 2364 growth falls from 2 4 percent annually in the first period to 0 7 percent in the second period To get an idea how much difference this makes over time at 2 4 percent growth the country s income per person will double in about 29 years At 0 7 percent growth it would take 99 years Or most recent available year Even the top quintile which at 9012 to 43 713 contains a mixture of middle income and highincome countries shows a sizeable falloff in growth from 2 6 percent in the first period to only 1 3 percent in the second period The only group which does not show a slowdown in growth is the bottom quintile with per capita income between 355 and 1225 annually where growth increases slightly from 1 7 to 1 8 percent However this is still not a good average perfor mance for the poorest developing countries and the slight improvement disappears without India and China A decline in the rate of improvement for life expectancy was found for the vast majority of low and middle income countries See Figure 2 The biggest drop was in the fourth quintile with life expectancy between 44 and 53 These countries saw an average annual increase of 0 56 years for 1960 1980 but almost no progress 0 03 years for the second period Over 20 or 25 years this makes a large difference For the first period countries in this quintile increased their life expectancy by about 11 years If this rate of improvement had continued the countries in this quintile in the second period would have raised life expectancy by 12 years instead they saw an increase of only 0 7 years The bottom middle and second quintiles also saw declines in the rate of progress The only The Scorecard on Development exception was the highest quintile with life expectancy between 69 and 76 years This quintile showed some improvement in the second period which was driven by the highincome countries in the group A decline in the rate of improvement for adult mortality was found for male and female adults for most groups See Figures 5 and 6 For females all quintiles except the best one show worse performance for the second period with the fourth quintile showing an actual increase rather than a decline in the rate of reduction in mortality rates For males the bottom three quintiles show worse performance for the second period with the fourth quintile showing an actual increase in mortality rates A decline in the rate of progress for child under 5 mortality was found across all quintiles although the reduction in progress is relatively small in the top two quintiles See Figure 7 A decline in the rate of improvement for infant mortality was found for all groups of countries See Figure 8 A reduction in the rate of increase of public spending on education was found for all groups of countries See Figure 9 For the higher income countries this is partly attributable to demographic changes A reduction in the rate of increase in secondary school enrollment was also found across all groups of countries in addition to a reduced rate of increase for primary school enrollment for the bottom two quintiles Implications Over the past 25 years a number of economic reforms have taken place in low and middle income countries 2 These reforms as a group have been given various labels liberalization globalization or free market 2 are among the most common descriptions Among the reforms widely implemented have been the reduction of restrictions on international trade and capital flows large scale privatizations of state owned enterprises tighter fiscal and monetary policies higher interest rates labor market reforms and increasing accumulation of foreign reserve holdings There is a general consensus that the majority of developing countries have benefited economically from the reforms even if they have sometimes been accompanied by increasing inequality or other unintended consequences The evidence in this paper indicates that this consensus could be mistaken The trends in growth rates and social indicators are
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