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The Great Escape: Health, Wealth and the Origins of Inequality

Author(s):Deaton, Angus
Reviewer(s):Parman, John

Published by EH.Net (March 2014)

Angus Deaton, The Great Escape: Health, Wealth and the Origins of Inequality.  Princeton, NJ: Princeton University Press, 2013. xv + 360 pp. $30 (hardcover), ISBN: 978-0-691-15354-4.

Reviewed for EH.Net by John Parman, Department of Economics, College of William and Mary.

In The Great Escape, Angus Deaton describes the historical rise of the world’s population out of poverty and poor health.  Deaton, the Dwight D. Eisenhower Professor of Economics in the Woodrow Wilson School of Public Policy and International Affairs and the Economics Department at Princeton University, offers a thorough accounting of the simultaneous rise of income and longevity; it is a general history of the progress of the world that recognizes the importance of both wealth and health to wellbeing.  The book’s constant theme is that this is a story of both growth and inequality.  Overall increases in income and longevity have been dramatic in scale but those gains have not been distributed evenly.  Deaton sets out to demonstrate just how impressive the escape from poverty and death has been and identify which groups have made that escape and which have not, a task the book accomplishes quite well.  In the process, many questions are raised about the underlying causal relationships between health, wealth and inequality.  It is here that the book leaves the reader with much to think about but few definitive answers.

While the book sets out to examine the nexus between health and wealth, making a strong case for why the two should be viewed in tandem, the bulk of the chapters treat them separately.  The first chapters trace the history of human health.  There is a brief treatment of health in pre-industrial times based on skeletal records and anthropological studies of hunter-gatherer tribes but the bulk of the material focuses on longevity from the time of the Industrial Revolution onward.   Deaton offers a clear, compelling story of how nutrition, scientific advance and particularly the rise of germ theory helped the Western world reduce mortality from infectious disease.

With this discussion of the history of health in rich countries, two central themes of the book take shape.  First, improvements in wellbeing often, at least initially, beget greater inequality.  Scientific advance brings about solutions to health problems that are initially affordable only for the wealthy.  Deaton’s examples range from smallpox variolation in the eighteenth century to the modern drugs readily available to rich countries but prohibitively expensive for those in poor countries.

The second crucial point Deaton seeks to make is that the spread of these innovations, the improvement in wellbeing throughout the income distribution, is dependent on public health programs and, more generally, politics and institutions.  The benefits of germ theory were not widespread until there was the political will and the state capacity to implement public health programs such as water treatment and other modern sanitation measures.

This issue is reinforced when Deaton turns to health in the modern world.  With elegant graphs and careful analysis, Deaton describes the overall rise in world life expectancies and the convergence of poor countries to rich countries but explains that these trends are misleading.  Life expectancies are rising in rich countries because we are making progress in extending the lives of our elderly, tackling issues of chronic adult diseases with expensive medical innovations.  The rise of life expectancies in the poor countries, however, is being driven by reductions in childhood mortality.  While declining childhood mortality is certainly good, it is distressing that it is still high enough to support large declines; children in developing countries are still dying from diseases for which medical science has answers.  The book further chips away at the rosy interpretation of convergence in life expectancies with data on heights that reveal far less convergence in health between rich and poor countries.

Deaton notes that it is not necessarily lack of income that has prevented poor countries from fully converging to the health outcomes of rich countries.  If one ignores China and India, there is no relationship between economic growth and long term declines in infant mortality.  (A recurring question throughout the book is whether one should treat India and China as just two unique cases out of many developing countries or focus on India and China given their enormous populations.  Deaton does an excellent job of explaining why answering this question is crucial for determining how to measure world progress and direct international aid efforts.)  It is the lack of good institutions in poor countries that helps maintain these health inequalities.  Deaton fingers failure of the state as a main culprit: governments fail in the provision of public health goods and underinvest in their health care systems.  He hints at a version of the resource curse; governments that gain their revenue and power from natural resources do not depend on the people for revenue and are therefore uninterested in the population’s general health and wellbeing.

In the later chapters, the book shifts from improvements in health to improvements in material wellbeing.   GDP per capita and poverty rates do the work that longevity and height did in the earlier chapters, albeit for a shorter time period and a smaller set of countries.  Deaton focuses on income in the United States over the twentieth century and GDP per capita and poverty rates for cross-country comparisons covering the past half-century.  As with longevity and height, Deaton goes to great lengths to explain how these measures are constructed and precisely what they can and cannot capture.  The limited data he employs to discuss income growth and inequality lead to a history that is well known to any economist.  The value of his discussion for the academic lies more in forcing the reader to reconsider the limitations of the stylized facts we have grown comfortable with.

Deaton’s history of material wellbeing echoes his approach to health.  The Scientific Revolution and the Enlightenment kick started a world in which innovation led to economic gains.  These gains have been enormous but far from evenly distributed either across or within countries. Technology is once again at the heart of both growth and inequality.  To explain American growth and inequality, Deaton points to the ideas of skill-biased technological change and the race between education and technology familiar to economic historians from the work of Goldin and Katz.  Bad institutions are once again a main contributor to the failure of poor countries to converge to rich countries.

The history of health, wealth and inequality leads to the pressing question of what is to be done.  As the book notes in great detail, many people are still living in poverty and dying from diseases that are now non-existent in wealthy countries.  Deaton’s answer to what should be done comes in the form of a strongly worded argument for what should not be done.  Aid, at least in its current form, is not the answer.  The bad institutions and bad governments that have kept poor countries from achieving the physical and material wellbeing enjoyed by those in wealthy countries also prevent aid from being effective.  Deaton argues at length that international aid is at best ineffective and often times counterproductive.  In contrast, his discussion of what can be done is rather brief.  The extensive work being done on how households in developing countries respond to various aid programs, the results of randomized control trials, and, most significantly, the potential impact of expanding educational opportunities in developing countries all receive passing mention but little analysis in terms of what effective steps may be taken.

The Great Escape is an eloquent and passionate description of what sickness and health look like for the world’s populations and economies.  Deaton’s history of health and wealth offers a compelling narrative for both the general reader and academics alike.  It raises a range of questions of why some countries falter, why others succeed and what can be done to close gaps between them.  Unfortunately, the book’s length cannot accommodate a rigorous discussion of the causal links between human behavior, institutions, health and wealth that matches the detail and care with which the histories of health and wealth are presented.   The book succeeds in demonstrating just how great the Great Escape was for many countries but leaves the reader largely uncertain about how others will follow.

John Parman (jmparman@wm.edu) is an assistant professor of economics at the College of William and Mary.  He is currently researching the impact of childhood health shocks on household resource allocation in the early twentieth century and the evolution of spatial patterns of segregation, health and economic development in the United States over the past century.

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Subject(s):Economic Development, Growth, and Aggregate Productivity
Historical Demography, including Migration
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative
18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII