Economic growth and human development: Evidence from Zambia

In this paper, we examine the two-way relationship between economic growth and human development in Zambia over the period 1970 to 2015. By applying the cointegration and vector error correction model techniques, our estimates demonstrate, in the first instance, that economic growth and human development are cointegrated. Second, there is no evidence of two-way causal effect observable between economic growth and human development in the short run. In marked contrast, we find that economic growth has long-run effect on human development, with no evidence of reverse causality. This shows that the endless fixation on economic growth has manifestly and consistently proven that GDP growth has had sluggish multiplier effect on inclusive development in Zambia. Finally, we draw countryspecific policy recommendations from our empirical findings.