The Impacts of Economic Growth on Human Development in East Africa: A Comparative Analysis among member Country of EAC and Ethiopia

No Thumbnail Available



Journal Title

Journal ISSN

Volume Title


Addis Ababa University


Economic growth is an important determinant of human development, which can contribute to the improvement of human development and poverty alleviation in East Africa countries. The economic growth rate of a country would be meaningful only if it is accompanied by improvement of human development. This study examines the impact of economic growth in enhancing the quality of human life in the current member countries of EAC and Ethiopia. Specifically, it analyzes the effect of the economic growth on human development of these countries for the period 1990/91 to 2011/12 by collecting quantitative from secondary sources. Empirical analysis has been performed by using descriptive and econometric technique to investigate the relationship between economic growth and human development. To achieve the objectives of the study, an econometric model for each country are estimated by using OLS method of estimation. So, this paper presents Six models for the sampled country to measure the impacts of proxies’ measure of economic growth on HDI (proxy measure of human development).By applying multiple linear regression model,HDI is regressed on LRGDP,LRGDPpc,RGDPg,AVA,PEE,PEH,Pr and POVL in each country that listed above. The paper concludes that the trends of the RGDP, RGDPpc and HDI have been fluctuated overtime. On average, the performance of these variables since 1990s and 2000s has been very low. This shows that a strong heterogeneity among these countries. This variation reveals that there is unequal performance of economic growth and human development in the East Africa countries. Moreover, all of the six countries models that estimated based on OLS i.e. regression results of each country indicate that LRGDP,LRGDP and RGDPg has a positive and insignificant impact on HDI. Similarly, the econometric results indicated that AVA,PEE and PEH have a positive and insignificant relationship with HDI. Although, Pr and POVL have a negative and insignificant impact on HDI. So, the OLS results showed unexpected reverse relationship with statistically insignificant effect at 10% and 5% levels of significance in all sampled East Africa countries except AVA in Uganda. Therefore, the econometric result is unreliable and invalid for policy formulation, policy analysis and predication purposes. Hence, member countries of EAC and Ethiopia should create a conducive macroeconomic environment and policy, and also NGOs and Government of these countries should commit their resources to invest in the human development sub sectors. But, further indepth research on this subject by using advanced econometrics methods is required in the future in the sampled countries under investigation



Economic Growth