World Development Report, 1980 Part I Adjustment and growth in the 1980s Part II Poverty and human development Annex World Development Indicators The World Bank August 1950 World Development Report 1980 The World Bank Washington, D.C. August 1980 © 1980 by the international Bank for Reconstruction and Development / The World Bank 1818 H Street, N.W., Washington, D.C. 20433 U.S.A. All rights reserved. ISBN 0-19-502833-3 cloth ISBN 0-19-502834-1 paperback ISSN 0163-8058 The Library of Congress has cataloged this serial publication as follows: HC59 World development report. 1978- .7 [New York] Oxford University Press. .W659 v.27cm. annual. Published for the World Bank. 1. Underdeveloped areasPeriodicals.2. Economic development Periodicals.I. International Bank for Reconstruction and Development. HC59.7.W659 330.9'172'4 78-67086 11 Foreword This third World Development Report reduce poverty, focusing on hu- the converse is true as welldirect is published at a time of difficulty man development, an important steps to reduce poverty do not and uncertainty for the world eco- complement to the approaches to obviate the need for growth. This nomyparticularly for the devel- poverty alleviation emphasized in Report emphasizes that the direct oping countries. They must adjust the two previous World Develop- attack on poverty, if it is ultimately to external payments imbalances, ment Reports. to be successful, must be com- higher energy prices and slower Human developmenteduca- bined with measures to ensure growth in world trade. That ad- tion and training, better health that the economies of the devel- justment will slow their growth and nutrition, and fertility reduc- oping countries continue to ex- for at least the next few years. tionis shown to be important not pand. The active support of the There is much that they them- only in alleviating poverty directly, richer nations is required to assist selves can do to ease the slow- but also in increasing the incomes this process through the provision down and to speed the expected of the poor, and GNP growth as of capital and technical knowledge subsequent recovery. But the bur- well. The vital message is that some and through the opening of their den of adjustment must be shared: steps we all have long known to markets to developing-country the industrialized and centrally be morally rightprimary educa- exports. There is a real risk that planned countries and the princi- tion, for examplemake good the domestic economic problems pal oil exporters also have a major economic sense as well. of these richer countries will cause role to play. The laudable objectives of hu- them to give inadequate attention The first part of this Report is man development, though, are far to the immense problems of the primarily about the economic pol- from easy to achieve. Nor are they developing world, and to the hard- icy choices facing both developing without cost. The Report draws on ships that narrow or short-sighted and richer countries and about the years of World Bank experience policiesin energy, trade and fi- implications of these choices for in the analysis of projects, sectors nancial assistancecan inflict. growth. The outlook for growth and national economies, and in This Report reflects the work of that it discusses is a cause for deep researchto examine the causes many of my colleagues in the World concernparticularly for low-in- and effects of progress in human Bank. The judgments expressed come countries and, among them, development and what it takes to do not necessarily reflect the views for the countries of Sub-Saharan implement successful programs in of our Board of Directors or the Africa. More generosity and ini- this area. governments they represent. As tiative in the provision of conces- While there is now increasing in previous years, the Report in- sional aid by richer countries is recognition that growth does not cludes the World Development urgently needed. obviate the need for human devel- Indicators, which provides tables It is vital, moreover, that suc- opment and other steps to reduce of social and economic data for cessful adjustment should not un- poverty, it must be stressed that more than 100 countries. duly sacrifice either the current living standards of the poor or the measures needed now to reduce poverty in the future. Growth is vital for poverty reduction, but it is not enough. The second part of the Report reviews other ways to Robert S. McNamara 111 This report was prepared by a team led by Paul Isenman and comprising Nicholas Hope, Timothy King, Peter Knight, Akbar Noman, Rupert Pennant-Rea and Adrian Wood. The Economic Analysis and Projections Department prepared the data and projections used in Chapter 2 and in the World Development Indicators. The authors would like to acknowledge the substantial help received from many contributors, reviewers and support staff. The work was carried out under the general direction of Bevan Waide and Hollis Chenery. iv Contents 1Introduction 1 Part IAdjustment and growth in the 1980s 3 2 The outlook for developing countries 3 Adjustment and recovery 3 Factors affecting growth 6 Regional growth in the 1980s 11 3International problems and policies 14 Energy 14 Trade 18 Capital flows 25 Part IIPoverty and human development 32 4Poverty, growth and human development 33 Dimensions of poverty 33 Three decades of poverty reduction 35 Poverty and growth 35 Sources of growth 36 Raising the incomes of the poor 40 5Human development issues and policies 46 Education 46 Health 53 Nutrition 59 Fertility 64 The seamless web 68 6Implementing human development programs: some practical lessons 71 Political support 71 Easing the financial constraint 72 Developing administrative strengths 75 Ensuring that services are used 78 International assistance 80 The importance of persistence 81 7Priorities and progress in regional perspective 83 Issues for planners 83 Sub-Saharan Africa 85 South Asia 88 Middle-income regions 90 Lessons for planning 94 8Summary and conclusions 95 Statistical appendix to Part I 99 Bibliographical note 102 Annex World Development Indicators 105 V Text tables 2.1Summary of prospects for growth 6 2.2Growth of exports and imports, 1970-90 7 2.3Percentage shares in world exports of goods and nonfactor services 7 2.4Net imports of oil by oil-importing developing countries, 1975-90 8 2.5Developing countries' savings and investment rates, 1980-90 9 2.6Current account deficits of oil-importing developing countries, 1970-90 10 2.7Debt-service ratios of developing countries, 1977-90 10 2.8Growth of GNP per person by region, 1960-90 11 2.9Developing countries' GNP per person, 1980-2000 13 3.1Shares of net world trade in commercial energy, 1977-90 16 3.2World merchandise trade, by country group, 1970 and 1977 21 3.3Product composition of developing countries' merchandise exports to industrialized countries and other developing countries, 1977 24 3.4Commercial bank claims on developing countries, 1976-79 27 3.5Average spreads over LIBOR for external borrowing, 1974-79 27 3.6Aid flows to developing countries and multilateral institutions, 1975-90 29 3.7Distribution of DAC donors' bilateral official development assistance, 1970-78 30 4.1Agricultural population in relation to crop area 39 4.2Irrigation and income, selected projects 43 4.3Dependency ratios, by income group 43 5.1Public expenditures on elementary and higher education per student, 1976 46 5.2Primary school enrollment, by income group 47 5.3Farmer education and farmer productivity 48 5.4Rates of return to education 49 5.5Public education spending per household, by income group 50 5.6Differences in life expectancy within countries 55 6.1Taxes as a percentage of GNP 73 7.1Sub-Saharan Africa: GNP per person 85 Statistical appendix tables SA.1Growth of population, GNP and GNP per person, 1960-90 99 SA.2Commercial primary energy production and consumption, by country group, 1977-90 99 SA.3Composition of world commercial primary energy supply, 1970-2020 99 SA.4Growth of merchandise exports, by product category and country group, 1960-77 and 1977-90 100 SA.5Direction of merchandise trade, 1970 and 1977 100 SA.6Capital flows and debt of the developing countries: oil importers and oil exporters, 1975-90 101 SA.7Capital flows and debt of the oil-importing developing countries: low-income and middle-income, 1975-90 101 Figures 2.1Growth of GNP per person: industrialized and oil-importing developing countries, 1965-80 5 2.2Developing countries' growth of GNP per person, 1970-90 6 2.3Energy production and consumption growth, by country group, 1980-90 8 2.4Developing countries' savings and investment rates, 1960, 1980 and 1990 8 2.5Net flows of medium- and long-term capital to developing countries, 1980 and 1990 9 3.1Petroleum prices, annual averages, 1972-80 14 3.2Actual and projected shares in world primary energy supply, 1970-2020 16 3.3Growth of developing countries' merchandise exports, 1963-73 and 1973-77 19 3.4Growth of developing countries' merchandise exports, by destination, 1973-77 24 3.5Developing countries' use of borrowed funds, 1970-90 25 3.6International bond issues, 1972-79 28 4.1Three decades against poverty 34 4.2National income and national poverty 36 4.3Population distribution by age, 1980 40 vi 4.4Income of poorest groups 40 5.1Enrollment ratios, by region, 1960-75 47 5.2Death by age groups, developing and industrialized countries, 1980 54 5.3Trends in birth and death rates, 1775-2050 64 5.4Income and fertility, 1978 66 5.5Influences on fertility 66 5.6Policy and poverty