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U.S./Russia: Analysis From Washington - What Economic Growth Can't Solve

  • Paul Goble

Washington, 12 August 1998 (RFE/RL) - Two studies -- one on life expectancy in Russia and another on welfare rolls in the United States -- show that economic growth by itself will not solve many of society's most difficult problems.

Indeed, the studies suggest, the widespread belief that economic growth will have that effect may even be making some of these problems worse by distracting attention from the real causes and undercutting efforts to use the political system to address them.

The first study examined the large and unprecedented declines in life expectancy in the Russian Federation. From 1990 to 1995, life expectancies for Russian men fell by 6.3 years and for Russian women by 3.4 years.

Most observers have blamed the economic situation there for these declines and thus assumed that an eventual return to economic growth will correct the situation. But this latest investigation found that such explanations were wrong and such prognoses almost certainly incorrect.

In conclusions published in the British Medical Journal last month, researchers discovered that the Russian regions with the largest declines in life expectancy were predominantly urban with "a higher average but unequal distribution of income."

Most of the decline in life expectancy, this study said, reflected an increase in the number of deaths in people between 30 and 60 and an increase in alcohol consumption rather than rises in infant and child mortality.

In releasing the study, Professor Martin McKee of London's European Center on Health of Societies in Transition, said that the focus on economics as a cause for declining life expectancies in Russia and other post-Communist countries was a mistake.

"It is not just impoverishment," McKee pointed out, "and we shouldn't depend on economic recovery to bring about improvements in health." Other factors -- "instability, fear of change, change itself, and crime, "for example -- are and will remain much more important.

The second study prepared for the U.S. Congress concerns the impact of a recent reform of the American welfare system that requires those who are able-bodied to work in order to receive assistance.

Since the adoption of that law in 1996 which eliminated the automatic provision of various kinds of government support for those unable to find jobs, the number of those on welfare in the United States has declined some 37 percent.

But the reason for that decline has become the subject of debate. Many analysts have argued that the fall in the number of those on welfare reflects the rapid growth of the American economy during that period rather than being a product of the law itself.

But this U.S. study found that changes in the regulations probably had a greater impact on the number of those receiving welfare than did the growth of the economy.

For example, this study noted that welfare roles had never declined more than seven percent in any previous period of economic growth and that the number of Americans receiving welfare during the boom years of the 1980s had actually increased by almost 500,000.

In releasing this study, Congressman Bill Archer, the Republican chairman of the House Ways and Means Committee and one of the authors of the 1996 legislation, said that the number of those on welfare had declined precisely because that law had changed "the culture of welfare."

Prior to the 1996 act passed by Congress and signed into law by President Bill Clinton, Archer suggested, "getting a government check" was "preferable to working." Because of the reforms, that pattern is being reversed, and consequently the number of people on welfare has fallen.

The subjects of these two studies and the societies they are focus on are very different. But both investigations have the effect of highlighting three aspects of national life that some people have lost sight of.

First of all, both studies suggest that economic growth, however many benefits it may bring to people experiencing it, will not and perhaps cannot solve all social and political problems.

Moreover, both studies show that high levels of economic growth may not lift all boats, that in the absence of political will, many may suffer even as a small number or even the majority gain.

And finally and perhaps most important, both studies demonstrate that the economy cannot serve as a substitute for political choice and that those who seek to use it in this way may be doing a real disservice to those in their societies least able to defend themselves.