Endemic Diseases and African Economic Growth: Challenges and Policy Responses

I examine the economic effects of disease and disease control. I consider both the effect of disease on conventionally measured GDP and also the monetary equivalent of the utility benefits from lower mortality. Regarding the effects on conventional GDP, I evaluate a number of approaches including cross-country regression (with and without instruments for disease) and simulation based on microeconomic studies. I also discuss theoretically and empirically the different channels that link disease and economic outcomes, including effects that run through labour productivity, education and population growth. Different approaches yield somewhat different results, but the overall finding is that there is at best weak support for the claims that the disease burden in Africa significantly lowers GDP or that improving health would provide a big impetus to economic growth. In contrast, the monetary equivalent of the utility benefits from better health can be extremely large. For example, reduced mortality in many developing countries has made a contribution to utility of roughly the same value as the growth of conventional GDP over the last several decades.