The positive effects of increases in per caput GDP on average nutrition at country level have been amply demonstrated in both the theoretical and empirical literature. Is there a reverse linkage, i.e. does better nutrition of the population facilitate economic growth? This paper examines the issue cast in terms of one central dimension of nutrition: food energy intakes.
It is accepted that under-nutrition constrains the productivity and hence earning capacity of individuals in a society in a number of direct and indirect ways. Under-nourished adults can carry out a reduced work-load and are more susceptible to illness, while under-nourishment reduces the ability of children to learn, by reducing school attendance and absorption capacity. In extreme cases, under-nourishment in children causes mental retardation and other handicaps which are eventually translated into reduced productivity in later life. Thus, persistent or episodic under-nourishment may have long-term as well as immediate effects on productivity and working capacity.
Indeed, the empirical literature at the microeconomic level (individuals and households) has provided evidence linking better nutrition to higher levels of productivity. Thus, in societies with a large number of undernourished, overall labour productivity, and consequently, returns to investments in the productive capacity of aggregate labour input will be lower. In such societies, overall growth will be compromised. Plausible as such a result may seem, evidence in supporting it using recent advances in data availability and improvements in econometric technique was lacking.
It is precisely this void in empirical evidence linking under-nutrition and economic growth at the aggregate level that the present paper addresses. Namely, the paper investigates the magnitude of the effect of under-nourishment on economic growth and attempts to identify the channels of transmission (direct effects on productivity and via impacts on health). In addition to this basic relationship, a number of other important relationships are investigated in the paper : (a) regional differences regarding the impact of under-nourishment on growth; (b) the impact that possible errors in measuring nutritional variables may have on the robustness of the estimated nutrition-growth relationship; and (c) the existence of "nutritional traps", i.e. the vicious circle of low nourishment, low economic growth, low nourishment. Thus the paper makes a significant contribution to the literature on the factors that account for the differences in growth performance across countries and regions.
The benchmark result of the study indicates that increasing the average daily energy supply (DES) to 2 770 kcal per person per day in a sample of countries that were below that level, could have increased the average annual GDP growth rate by 0.8 percentage points during the period 1960-1990 covered by the study. If only the countries with DES levels below 2 770 calories/caput/day are considered, then raising the average caloric intake to that level would add 1.13 percentage points to their annual growth rate. Although the results should be looked at from a "ceteris-paribus" perspective (i.e. as marginal changes all other things being equal), this basic result provides an idea on the magnitude of cumulative growth losses in countries suffering from under-nourishment, especially if one considers that the average annual growth rate in those countries for the period under consideration was around two percent.
The paper also suggests the existence of nutritional growth traps. The mean growth rate of countries having low levels of food inadequacy is about three times as high as the mean growth rates in countries with high levels of food inadequacy.
A very important implication of the study, for developing country governments and donors alike, is that policies (including development aid) which reduce or eliminate under-nourishment in developing countries should not be viewed only in terms of their welfare and humanitarian benefits, but also in terms of their growth-promoting dimensions. It is also hoped that by publishing the present paper, FAO opens an important debate on the short- and long-term implications of poverty and hunger for the overall development effort.
Jacques Vercueil
Director
Agriculture and Economic
Development Analysis Division
