Human development and economic activity : government expenditure and health in Cuba and Kerala

Abstract

The biophysical limits of the earth are used as a starting point to explore the pursuit of health, as a component of human development, at stable levels of economic activity. The crux of the matter lies in the relationship between government expenditures in health, their impact on health outcomes and the government's fiscal capability to maintain the expenditures. Evidence from the successful pursuit of health in Kerala, India and in Cuba, provides several observations, namely: health outcomes and growth are not closely linked; health can be pursued at low levels of economic activity; fiscal crises are not closely linked with government health expenditures nor with levels of economic growth; and finally that government health expenditures can reach points of diminishing marginal returns. Together these observations diminish the importance of economic growth in the pursuit of health and permit hypothesising about pursuing good health outcomes at stabilised levels of economic activity.