Diseases and Economic Development

How does the long term impact of different diseases affect economic development?

Editors' Response:

We will assume that you are writing from a developing nation, as this would be the most common situation where a question like this would be asked.

Fatal diseases that reach epidemic proportion obviously have the potential to wipe out an entire segment of the population--an age group (what would be called an age cohort), an ethnic group more susceptible to the disease than others, or a vulnerable population such as the elderly.

If the people who are dying are younger, the economic impact is greater. If the particular disease affects the age and gender of people who are doing the most productive work, in terms of bringing in income from outside the community, the effects will be more long-lasting.

From an economic development standpoint, then, good health is very important to productive workers.

If non-fatal disease strikes often, that will reduce the amount of work that is completed.

A product sold to others from outside your immediate region will have what is called a multiplier effect within your region.

The multiplier means that the same dollar will get passed around the community maybe two, three, or four times before it goes outside of the community. Each time, if your society is a capitalistic one, someone makes a little money.

So it is not simply a matter of one day of illness means one day of lost wages. If the earner helps to make something that is sold outside your community, there will be this ripple effect, a multiplier, causing the impact to be more than one day of lost work.

In terms of attracting investment from outside the community, if you are in a place where international investment is practical to consider, rampant disease will have a very negative impact on those investment decisions.

Keep in mind also that another economic development impact of disease may be that children will be left without parents, which often has a serious round of negative effects on their ability to obtain an education, learn culturally appropriate behavior, and develop an optimistic and work-centered lifestyle.

World-wide, solving major disease problems, including malaria and AIDS, is critical.

We suppose someone will argue that epidemics are nature's way of controlling population. We do agree that global population is becoming too large, and that overpopulation is a very serious issue indeed.

However, most of us would prefer voluntary decisions to limit family size and birth control to having entire age cohorts wiped out in certain nations.

In short, disease doesn't help economic development in the least, and in fact it hinders everything that a developing country needs to do, such as improve education for all, build road infrastructure, develop a system of saving money so that capital is available for business development, and devise a stable and predictable government.

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