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Some kinds of growth have costly deficits

A quick quiz: Which of the following countries has had the smallest increase in life expectancy since 1990 — Bangladesh, China, Pakistan, South Korea or Sudan?

The answer is not war-torn Sudan or tumultuous Pakistan. It isn't South Korea, which started from a higher level than any of the others. And it isn't abjectly poor Bangladesh.

It's China, the great economic success story of the last two decades and the country that inspires some combination of fear and envy around the world. Yet when measured on one of most important yardsticks of all, China does not look so impressive.

From 1990 to 2008, life expectancy in China rose 5.1 years, to 73.1, according to a World Bank compilation of United Nations data. Nearly every other big developing country, be it Brazil, Egypt, Ethiopia, India, Indonesia or Iran, had a bigger increase over that span, despite much slower economic growth. Since 2000, most of Western Europe, Australia and Israel, all of which started with higher life expectancy, have also outpaced China.

The moral? Economic growth makes almost any societal problem easier to solve, but growth doesn't guarantee better lives — or better health — for everyone. That's been true for centuries. The rate of growth and the kind of growth both matter.

If you scan the globe today, you may end up wondering whether any country has landed on the right mix. Europe offers a good life to many people, with generous vacations, parental leaves and health benefits, but its economies have been growing slowly, which is one reason its debts are so onerous.

The United States grew more quickly in recent decades, but many of the gains have flowed to a small slice of the population. Median household income, adjusted for inflation, actually fell from 2000 to 2007 — and has fallen more since the financial crisis began in 2007.

China can sometimes look like the economy of the future, having grown stunningly fast for almost 20 years now, lifting hundreds of millions of people out of poverty. But it, too, has real problems. Above all, its growth has been uneven. The coast has benefited much more than the interior. Some aspects of life have improved much more than others.

Whether China can switch to a more balanced form of growth, as its leaders have vowed, will obviously have a big effect on the rest of the global economy. Yet it's worth remembering that the biggest impact will be on the one-sixth of the world's population that lives in China. And arguably the best example is that the country has grown vastly wealthier but only modestly healthier.

There is an intriguing parallel here to the Industrial Revolution. The eminent economist Richard Easterlin has noted that longevity and health did not improve much when economic growth took off in the early 19th century.

With rising incomes, people could afford better food, clothing and shelter. But they were also exposed to more disease because so many of them were moving to cities. The combined effect appears to have been "stagnation or, at best, mild improvement in life expectancy," Easterlin has written.

The Mortality Revolution, as he calls it, did not occur for almost another a century. It depended on relatively cheap investments in public health, like sanitation, and on the spread of scientific methods.

Similarly, in today's China, many more people have acquired indoor plumbing, heating, air conditioning or other basics. Other aspects of the boom, however, have pushed in the opposite direction.

As in the Industrial Revolution, many people have left the countryside, where disease rates are lower, and poured into crowded cities. Accidents have become common, like the Shanghai fire last week and a series of workplace tragedies in recent months. Obesity is rising. Pollution is terrible.

I recently spent some time in China, and despite everything I'd heard about the pollution, I was still taken aback. The tops of skyscrapers in Beijing can be hard to see from the street. Breathing the smog can feel like having a permanent low-grade sinus infection. For the Chinese, cancer has displaced strokes as the leading cause of death, partly because of pollution, notes Yang Lu of the Keck School of Medicine at the University of Southern California.

Finally, there is the medical system itself. The dismantling of state-run industrial companies over the last two decades has ended the cradle-to-grave benefits system known as the iron rice bowl. In its place is a market-based medical system many Chinese cannot afford. Even in emergencies, people sometimes must bring cash to the hospital to get treatment.

Early last year, the Chinese government began expanding health insurance coverage, with the goal of making it universal by 2020. The initial signs look pretty good. The World Bank does not have data past 2008, but numbers published by the CIA suggest that life expectancy has risen in the last two years. In my travels, I visited a simple, clean clinic in rural northern China that seemed to be providing the kind of basic care that could make a huge difference.

Of course, whatever the problems with China's boom, it still has significantly improved the lives of its citizens. Many fewer of them live in grinding poverty, and the population is living a good bit longer, even if the gains have not been as large as in many other countries.

Over any extended period, economic growth is probably necessary for higher living standards. It's just not sufficient. As Tsung-Mei Cheng, a health policy expert at Princeton, argues, "Economists and the media tend to pay too much attention to the growth of GDP overall, and not enough to its distribution."

There is, after all, another large country with unimpressive recent gains in life expectancy, even smaller than China's. That's right: the United States. Since 1990, we have been passed by Chile, Denmark, Slovenia and South Korea, among others. China is still five years behind us, but it's gaining.

Some kinds of growth have costly deficits 11/27/10 [Last modified: Friday, November 26, 2010 9:12pm]
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