Sub-optimal Investments in Public Health: A Case for Persisting Poverty


  • Shirin Akhter Associate Professor, Department of Economics, Zakir Husain Delhi College, University of Delhi, India
  • Simin Akhter Naqvi Assistant Professor, Department of Economics, Zakir Husain Delhi College, University of Delhi, India



Sub-Optimal Investments, Public Health, Persisting Poverty


Investment in Human capital is one of the most important variables that determine long run economic growth of an economy, even more so for low income, capital deficient, labour abundant economies. In the context of additions to value added, endowments of education and health of workers take prominence. This paper theoretically and empirically shows that suboptimal investments in health care lead to slowing down of economic growth in the long run and causes poverty and inequality to persist. This persistence of poverty can be despite rapid rates of economic growth in the short run. The paper uses endogenous growth models to argue that investments in health are necessary for long run, sustainable economic growth. It also uses secondary data to draw an overview of the public health scenario in India, bringing to fore the inadequacies of the structure and the need for a greater and more dedicated intervention by the state.


Acemoglu, D., & Robinson, J. (2010). The Role of Institutions in Growth and Development. Review of Economics and Institutions, 1(2), Article 1. DOI:10.5202/rei.v1i2.1.

Ahmad Ahsan & Ashish Narain. (2008). Towards Understanding Development in Lagging Regions of India. Paper presented at the Conference on Growth and Development in the Lagging Regions of India, Administrative Staff College of India; Hyderabad 2008.

Atkinson, A. & Bourguignon, F. (1982). The Comparison of Multi-Dimensioned Distributions of Economic Status. Review of Economic Studies, 49, 183-201.

Alkire S and James Foster (2009). Counting and multidimensional poverty measures. OPHI, Working Paper No. 7.5.

Atkinson, A. B. (2015). Inequality: What can be done? Harvard University Press, New York.

Bloom, D. E., Kuhn, M. & Prettner, K. (2018). IZA DP No. 11939, Health and Economic Growth, November 2018.

Bourguignon, F. & Chakravarty, S. R. (2003). The measurement of multidimensional poverty. Journal Of Economic Inequality, 1(1).

Chakrabarty, S. (1987). Development Planning: The Indian Experience. Oxford: Clarendon Press.

Chintan R. (2021, August 9). Covid-19 Pandemic Woes: An Opportunity for the Private Sector and Niti Ayog? News click.

Daron Acemoglu, Simon Johnson & James A. Robinson. (2005). Institutions as a Fundamental Cause of Long-Run Growth. In Handbook of Economic Growth, Volume IA edited by Philippe Aghion and Steven N. Durlauf.

Deolalikar, A. B., Brillants et al., (2002). Poverty and Role of Institutions in Developing Asia. ERD Working paper No.10, ADB.

Dev, Mahendera, S. & Sengupta, R. (2020). Covid-19: Impact on the Indian Economy. IGIDR Working paper series, WP-2020-013.

Dreze, J. and Sen, A. (1996). Economic development and social opportunities. OUP.

Duggal R. (2007, November). Poverty & health: Criticality of public financing. The Indian Journal of Medical Research, 126(4), 309-17.

Economic survey (various). New Delhi, Ministry of Finance, Government of India.

Ehsan, S. M. (2001). Institutional framework and poverty: A Transition Economy Perspective. CESifo Working paper No. 593.

Gill, Kaveri (2012). Promoting Inclusiveness: A framework for assessing India’s flagship social-welfare programmes. UNICEF Social policy Working paper series 2.

Gordon, D. (2005). Indicators of Poverty & Hunger. Expert Group Meeting on Youth Development Indicators United Nations Headquarters, New York 12th-14th December 2005.

Gordon, Jim & Poonam, Gupta. (2004). Understanding India’s Services Revolution. IMF Working paper WP/ 04/171.

Harriss-White, B. (2005). India’s market society: three essays in political economy. Three Essays Collective, Gurugram, India.

Holt, S. L. (1990). Role of Institutions in poverty reduction. WDR.

Hulme, D. & Paul Mosley. (1996). Finance Against Poverty. Routledge, London.

Kabeer, Naila. (2000). Social Exclusion, poverty and discrimination: Towards an analytical framework. IDS bulletin, 31(4).

Kanbur, R. & Lyn Squire. (1999). The Evolution of Thinking about Poverty: Exploring the Interactions. In Gerald M. Meier and Joseph E. Stiglitz (Eds.), Frontiers of Development Economics: The Future in Perspective. World Bank and Oxford.

Kundu A. (2006). Globalization and the Emerging Urban Structure: Regional Inequality and Population Mobility. India: Social Development Report, Oxford, New Delhi.

Kundu, A. & Sarangi, N. (2010). Inclusive Growth and Income Inequality in India under Globalisation: Causes, Consequences and Policy Responses. Proceedings of the Conference of Regional Disparities in Asia, UNDP, Colombo.

Kundu, A., Shariff, A., & Ghosh, P. K. (2007). Indexing Human Development in India: Indicators, Scaling and composition, in Abusaleh Shariff and M. Krishnaraj (Eds.), State, Markets and Inequalities. Orient Longman, New Delhi.

Musgrave, R. A., Merit goods, The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. Link

Nachane, D. M. (2011). India Development Report. OUP.

Naila, K. (2008). Social exclusion, poverty and discrimination. Critical Quest, New Delhi.

North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press.

Panagariya, Arvind, Rao, M. Govinda, Chakraborty, Pinaki (2014). State Level Reforms, Growth, and Development in Indian States. Oxford University Press.

Partha Dasgupta. (1995). An Inquiry into Well-Being and Destitution. Oxford University Press.

Quibria, M. G. (2012). Microcredit and Poverty Alleviation: Can microcredit close the deal?. UNU WIDER, Working Paper No. 2012/78, September.

Rama Baru et al., (2010). Inequities in Access to Health Services in India: Caste, Class and Region. Economic and Political Weekly, 52(3).

Ray Debraj. (1998). Economic Development. Oxford University Press.

Sen, A. (1976). Poverty: An Ordinal Approach to Measurement. Econometrica, 44(2), (1983). Poor relatively speaking. Oxford Economic Papers serial no. 35, (1992). Inequality reexamined. Oxford Clarendon press, (1999). Development as Freedom. Oxford OUP, (2004). Social exclusion concept application scrutiny. Critical Quest, New Delhi.

Sen, A. K. & J. Dreze. (2013). India and her contradictions: An Uncertain Glory. Princeton University Press. New York.

Sen Abhijit & Himanshu. (2004, September). Poverty and inequality in India II: Widening disparities during the 1990s. Economic and Political Weekly, 25, 4361–4376.

Sen, B. (1997). Health and poverty in the context of country development strategy: a case study on Bangladesh. Geneva: World Health Organization. Macroeconomics and Health Development Series No. 26. Unpublished document WHO/ICO/MESD.26.

Stiglitz, J. E. (May, 1989). Markets, Market Failures and development. AEA Papers and Proceedings, 79(2).

Srinivasan R., Health care in India - Vision 2020, Issues and prospects. Retrieved from Link.

Todaro, M. P. & Smith, S. C. (2011). Development Economics. Pearson, New York.

Wagstaff. A Poverty and health sector inequalities, based on: Wagstaff A. Poverty and health. (CMH Working Paper Series, Paper No. WG1: 5). Retrieved from Link.




How to Cite

Akhter, S., & Akhter Naqvi, S. (2023). Sub-optimal Investments in Public Health: A Case for Persisting Poverty. Asian Review of Social Sciences, 12(1), 7–14.