Economic growth and economic development 218

Introduction to Modern Economic Growth large improvements in life expectancy, particularly among the relatively poor nations, that took place starting in the 1940s These health improvements were the direct consequence of significant international health interventions, more effective public health measures, and the introduction of new chemicals and drugs More important for the purposes of understanding the effect of disease on economic growth, these health improvements were by and large exogenous from the viewpoint of individual nations Moreover, their impact on specific nations also varied, depending on whether the country in question was affected by the specific diseases for which the cures and the drugs became internationally available The impact of these health improvements was major, in fact so major that it may deserve to be called the international epidemiological transition, since it led to an unprecedented improvement in life expectancy in a large number of countries Figure 4.15 shows this unprecedented convergence in life expectancy by plotting life expectancy in countries that were initially (circa 1940) poor, middle income, and rich It illustrates that while in the 1930s life expectancy was low in many poor and middle-income countries, this transition brought their levels of life expectancy close to those prevailing in richer parts of the world As a consequence of these developments, health conditions in many parts of the less-developed world today, though still in dire need of improvement, are significantly better than the corresponding health conditions were in the West at the same stage of development The international epidemiological transition allows a promising empirical strategy to isolate potentially-exogenous changes in health conditions The effects of the international epidemiological transition on a country’s life expectancy were related to the extent to which its population was initially (circa 1940) affected by various specific diseases, for example, tuberculosis, malaria, and pneumonia, and to the timing of the various health interventions This reasoning suggests that potentiallyexogenous variation in the health conditions of the country can be measured by calculating a measure of predicted mortality, driven by the interaction of baseline cross-country disease prevalence with global intervention dates for specific diseases Acemoglu and Johnson (2006) show that such measures of predicted mortality have a large and robust effect on changes in life expectancy starting in 1940, but have no 204