“Impact of
Economic Growth on Achieving MDGs”
Citation: Panda, M. and A. Ganesh-Kumar. 2007.
“Impact of Economic Growth on Achieving MDGs”. Report submitted to UN Economic
and Social Commission for Asia and Pacific, Bangkok.
Abstract: This paper examines the factors that
affect some of the Millennium Development Goals (MDG) indicators relating to
poverty, education, gender parity and health, and quantifies the extent to
which economic growth alone can help in achieving the MDG targets. Income
elasticity of the MDG indicators have been estimated using cross-country data
from the Asia-Pacific region, after controlling for several non-income factors
and taking care of several econometric issues. Our income elasticity estimates
are much lower than those reported in other studies, and suggest a less than
proportionate response for all the indicators including measures of income
poverty. Given these elasticities and the actual per capita GDP growth
performance of different countries in the region we find large substantial
shortfall from the MDG targets is likely to occur if the countries were to rely only the economic growth process. Income growth has a
substantial but not adequate role in achieving the MDG target with regard to
income poverty and nutrition, but is hardly effective with regard to achieving
the targets for education, gender parity and health indicators. The paper also
identifies some important non-income factors that could help in bridging the
gap between the targets and the income driven projected levels of the
indicators.