Globalization and health: An empirical investigation

Abstract

This article empirically examines the impact of globalization on the health status of countries by using panel data. Unlike previous studies, it has attempted to use three different dimensions of globalization and estimate their impact on health status measured by infant mortality rate and life expectancy. It also introduces an initial level of development status as an explanatory variable and found that it has an important role. The fixed effects panel data analysis shows that globalization has a positive impact on the health indicators. Out of the three dimensions of globalization, namely, economic, social and political, the first one has the highest influence on health for the less developed countries. However, as one moves up the ladder of development, social dimension becomes more important. Moreover, the pace of improvement in health indicators is faster in developed countries, indicating a divergence between the developed and the underdeveloped world.

Keywords

Globalization health status human development status infant mortality rate life expectancy underdeveloped countries

Introduction

Several studies consider underdeveloped countries from Africa, and South Asia, as examples of asymmetric development process being propagated through the process of globalization (Cornia, 2001; Ouattara, 1997). The argument is that these economies are not mature enough to stand shoulder to shoulder with the developed world, and hence are not able to garner the positives of the process of globalization. However, the International Monetary Fund (IMF, 2001) has argued that the integration in the international economy would be a major force behind the economic growth in developing countries, resulting in development and poverty reduction. This debate would be better informed if the underdeveloped countries are subjected to a test checking whether globalization has any impact on their socio-economic development process. Since our interest is to examine the nature of the impact of globalization on the socio-economic welfare indicators of these countries, we follow the methodology of comparing current status with the previous levels of development in these countries. The other way used to check the progress in these countries is comparison with all other countries. For this purpose, the study uses the initial level of human development status to differentiate. We use health status, a major indicator of the socio-economic development of a country, to provide the evidence in the argument. By and large, the results show contrarian evidence to the argument about these countries not getting benefits of globalization. Furthermore, the initial level of human development status is found to be playing an important role.

The present study is organized into five sections. The section ‘Literature review and framework’ explores the existing literature on how globalization may affect health and development process at large. The section also proposes a framework which talks about possible pathways of the likely impact on health. The next section ‘Data and methodology’ describes the methodology used to analyse the data. The sections ‘Results and discussion’ and ‘Conclusion’ present results of the current study and inferences and conclusions drawn from them, respectively.

Literature review and framework

Diseases have always travelled along trade routes, so there is a long-standing relationship between health and liberalization (Deaton, 2004). HIV/AIDS and Ebola are recent examples of how diseases spread across boundaries. Health, being an important development indicator, has been used to see impact of globalization or international trade on development process (Deaton, 2004; Levine and Rothman, 2006; Krishnakumar and Sarti, 2014; Umaña-Peña et al., 2014).

Globalization

Globalization is vaguely defined as increasing integration of national economies into an overarching world economy (Ervin and Smith, 2008; Pang and Guindon, 2004). This definition is very narrow in its explanation. Over the years, the concept of globalization got a more and more inclusive definition. The World Bank and the IMF have acknowledged that globalization is not just an economic phenomenon but also a larger integration of nations, societies and cultures across geographical boundaries (Ervin and Smith, 2008). World Health Organization (WHO) describes globalization in two interconnected issues: the flow of factors of production and products and policy influences.

Globalization, or the increased interconnectedness and interdependence of peoples and countries, is generally understood to include two interrelated elements: the opening of borders to increasingly fast flows of goods, services, finance, people and ideas across international borders; and the changes in institutional and policy regimes at the international and national levels that facilitate or promote such flows. (WHO Glossary)

Dissecting globalization further, based on above explanations, the process may be divided into three distinct but interrelated components: economic, social and political globalization (Dreher, 2006; Keohane and Nye, 2000). Although some of the researchers argue to include ecological dimension in the explanation of globalization, it is really a part of the economic and political globalization.

Economic globalization

Economic globalization refers to the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and wide and rapid spread of technologies. (Shangquan, 2000)

This dimension is mainly about trade and capital movement across borders. Keohane and Nye (2000) included the flow of goods, services, capital and information related to market exchanges in economic globalization. Shangquan (2000) argued the economic globalization to be an irreversible phenomenon for the world attributed to the continuous expansion and integration of global market frontiers. Along with trade, movement of capital in terms of foreign direct investment, portfolio investments and remittances play an important role in making economies more interdependent (Dreher, 2006). This also includes the flow of technology and information about production systems (International Labour Organization [ILO]).

This is mainly based on the processes inbuilt into the globalized economy like low-cost production of certain good or service in one country for markets in other countries (Ervin and Smith, 2008). Multinational companies have utilized the leverage provided by globalization to produce 11% of the world GDP while employing only 1% of the world population (Dembinsky, 2003).

Social globalization

The social dimension of globalization refers to the impact of globalization on the life and work of people, on their families, and their societies. Concerns and issues are often raised about the impact of globalization on employment, working conditions, income and social protection. ILO (2004)

Globalization affects people through different pathways, some beneficial, some not. The most profound impact on society has been of advances in communication technology. Today, it is very easy to connect to someone residing on the other side of the globe within no time. This resulted in thickened human interactions that has resulted in cultural exchanges happening across different nationalities, castes, races and cultures. So people of different strata have started adopting practices and habits of other stratum or groups very easily (Ervin and Smith, 2008). It also involves the movement of ideas and people having ideas and information irrespective of religion and race barriers (Keohane and Nye, 2000). Today, it is very easy to find a Christian church in the remote areas of India and Hindu temples all across the world. This is a symbolism of how globalization has touched human lives and these interactions also carry practices and beliefs along with them, which further get entrenched in lives of people. Beynon and Dunkerley (2000) coined a term – ‘cultural hybridization’ – to explain the phenomenon of acceptance of Western culture in Asian and African underdeveloped countries.

Political globalization

Traditionally, politics and policy making have been internal to the nation but with ever increasing integration and interconnectedness, even national policies need to be relooked and revised to be coherent with the global environment. With increasing economic globalization, each country has to frame her trade policy, tariffs, antidumping and intellectual property rights commensurate with the need of integrating globally. More and more multilateralism is required in policy making.

Political globalization ‘refers to an increasing trend toward multilateralism toward an emerging “transnational state apparatus”, and toward the emergence of national and international nongovernmental organizations that act as watchdogs over governments and have increased their activities and influence’. (Moghadam, 2005)

This need for multilateralism is ever increasing, with climate change and terrorism being the phenomena affecting all across the globe. It is also imperative for the developing and underdeveloped world to participate and raise their concerns in World Trade Organization (WTO), World Economic Forum (WEF) and UN councils for their right and welfare. Otherwise, these organizations tend to favour the economically powerful and influential countries in policy making (Norchi, 2000; Walker, 2011).

The article has used the Konjunkturforschungsstelle (KOF) globalization index (Swiss Federal Institute of Technology, Zurich, n.d.) as an indicator for empirical analysis. For simplicity, for the operational definition of globalization and its components, namely, economic, political and social globalization, the article uses definition as per the index (Dreher, 2006; Swiss Federal Institute of Technology, Zurich, n.d.).

Globalization and health

The major contentious issue for public health researchers opposing globalization is inequality of health outcomes between the developed countries and the underdeveloped countries (Huynen et al., 2005). However, there is a flaw in this argument as one cannot, and should not, expect the underdeveloped countries to reach the levels of the developed world overnight. It is a gradual process that may take time. Even the United Kingdom, the first one to industrialize, had no health indicators to boast off before economic progress started. She had to wait for decades to uplift the entire population to a satisfactory level of welfare (Kenny, 2006). The same is true for most of the developed countries.

Globalization affects health through diverse and complex pathways. Usually, its effects on health mediate through income, inequality, access to health system network, availability of basic sanitation and water facilities and environmental factors (Cornia, 2001; Cornia & Panicciá, 2000). For better depiction of these pathways, Woodward et al. (2001) and Labonte and Torgerson (2002) have given a framework. Woodward et al. (2001) mainly focused on the economic globalization and pathways of its impact on health. They saw this conceptual framework as a basis for the integration of health policy in domestic as well as international economic policies by the countries. Their main argument is about trickling down effect of income growth due to globalization that mediates through higher disposable income for the individuals and more fiscal space to accommodate higher public health spending.

Labonte and Torgerson (2002) modified this conceptual framework to dissect further policy making and decision-making processes at various levels, right from household to the international multilateral agencies. They also introduced the environmental aspect to the discussion. They argued that the developing countries have to take into account the global macro policies while designing the domestic economic as well as welfare policies.

The basic argument for the globalization resulting in health improvements is the trickle-down mechanism that works through the economic aspect of globalization. Due to integration in international economic and trade system, a country would experience higher GDP and hence higher personal disposable incomes as more people would get employment and productivity too would rise (Dollar and Kraay, 2004). Increased GDP may also result in higher tax revenues and hence more resources for government. The higher disposable income may result in higher spending on nutrition and healthcare, which would result in better personal health levels. At the same time, increased resources with the government would result in stronger public health infrastructure and spending on healthcare, which will result in better health across the country (Pritchett and Summers, 1993).

Globalization’s impact is not only through the economic component but also many other factors, such as technology transfer, information spreading, migration of people, cultural adaptations and political discourse that also affect health and socio-economic development at large. Over and above this, issues like intellectual property rights and pollution may have a complex influence on the health outcomes of the underdeveloped world. Apart from the economic dimension, political and social dimensions of globalization may have a significant impact on health. Social dimension through adaptation of cultural practices, modification and changes in diet and food intake and information exchanges happening across borders affect the health and human development (Krishnakumar and Sarti, 2014). A nation’s involvement in multilateral decision making and bilateral relations with other countries may bring more resources and aid for health and development. This involvement at the global level may help bring latest technologies and treatment to the nation that may be instrumental in handling health issues for a nation.

Infectious diseases in the developing world have been reduced due to technology transfer that has taken place as a part of the globalization process. However, now, new evidence suggests that non-communicable diseases are spreading to the developing and the underdeveloped world from developed countries along with liberalization (Labonté et al., 2011). This change in disease pattern is a result of a more sedentary lifestyle and changes in food habits and lifestyle.

The General Agreement on Trade in Services (GATS), adopted by the WTO in 1995, has taken connectedness of countries across the globe to a newer height. Health services started getting affected by this, both positively as well as negatively. Medical tourism and cross-border movement of patients have become a large industry. However, African countries are not at the beneficial end in this evolution as they do not have the medical infrastructure or facilities as some of the Southeast Asian countries such as India possess. However, along with this, movement of health professionals have also started. Many developing countries benefitted in terms of resource saving when their citizens started going abroad to study medicine to come back and serve their native land. It resulted in faster knowledge transfer and technology adaptation. However, it has a flip side also. Many such persons never returned to serve their own countries. It hits badly the health system of those developing and underdeveloped countries (Bundred and Levitt, 2000).

Political integration through participation in multilateral agencies, such as the United Nations and the World Bank, has resulted in benefits for the African countries as it has brought many grants and overseas aid. Although it is debatable whether such aids are in the ultimate interest of these countries, they have resulted in better capabilities for these countries to avoid real health disasters (Gbesemete and Gerdtham, 1992).

There are a few empirical studies that attempt to find the impact of globalization in general and international trade in particular on health status. Deaton (2004) and Krishnakumar and Sarti (2014) have examined the impact of globalization on health. Deaton (2004) has argued that globalization might have positive effects on health status to an extent to which globalization promotes economic growth. According to him, on one hand, knowledge and technology transfer about health has facilitated improvement and, on the other hand, an outburst of HIV/AIDS in the later part of the 20th century has resulted in slower improvements in health in underdeveloped countries compared with the developed world. Though Krishnakumar and Sarti (2014) have human development as their main focus, they have discussed the impact on health too. They found that greater integration in international economy and participation in multilateral activities was beneficial for health across countries.

Apart from these empirical studies, Cornia (2001) argued in favour of the positive impact of globalization on health. However, he had reservations about trickling down of this positive impact without favourable domestic conditions and prudent macroeconomic policy. Therefore, he argued that these benefits could not be realized to the full potential in Africa and Latin America because of weak domestic economy, policies and the asymmetric global economic environment. Dollar (2001) had similar arguments about the positive impact of globalization and liberalization on health and also emphasized on the requirement of strong domestic economic policies and suitable international architecture for realization of all the possible benefits.

Levine and Rothman (2006) attempted to study how trade had affected child health. They found that openness of an economy resulted in slightly reduced infant and child mortality rates. They argued that those who overemphasized the negative consequences of trade on health were not totally right. Davies and Quinlivan (2006) found a positive impact of trade and openness on social welfare across countries of the world. Their main focus was on human development. They found developing countries that have opened their economies had higher per capita income and hence better welfare compared with countries with closed economies. Owen and Wu (2007) have analysed the effect of trade openness on health indicators like infant mortality rate (IMR) and life expectancy (LE). They found a positive impact of international trade openness on health status. Their findings also suggested that benefits in terms of health improvement were higher for poor countries compared with developed countries. Umaña-Peña et al. (2014) have recently found that trade in services had a positive impact on health when analysed using cross-sectional regression, but the impact was not significant statistically when analysed using the difference regression equation.

The above studies indicate the mixed effect of globalization and international trade on the health status of countries. For this article, we have used LE and IMR as indicators of the health status of a country. It would be apt to understand how different globalization indicators may affect these health variables individually.

LE is about the longevity of life and IMR is about the ability of a newborn to survive the first year of life. The economic component of the globalization, which mainly comprises of trade openness and investments in the domestic economy, affects both LE and IMR through income effect. As more trade and investments happen, income in hands of citizens tend to go up and investments in better healthcare and nutritious food also go up, resulting in these positive outcomes. With higher income, government also tends to focus on developing welfare infrastructure and policies, resulting in more institutionalized maternal care and consequently less infant mortality. Investments and trade bring better quality to the healthcare sector as well as new treatments and medicines that were previously not available in the economy. This results in longevity in life.

Social interaction with the outside world, especially with the developed world, has brought changes in the customs and rituals that were not scientific. The developing world has started accepting more scientific ways to infant care that has resulted in more improvements in the health of infants. More information about diseases and medicines and preventive care has resulted in better health across the age groups, resulting in better LE.

Political integration of a country in the international arena results in better bilateral relations with developed countries and more involvement in multilateral decision making. This results in more development aids flowing to the developing and underdeveloped world. Multilateral agency decision making may have been influenced by the needs of the developing and underdeveloped world and proper resources may be diverted to those needs. Health-related aid for African countries is a good example of this.

Overall, globalization, through its economic – through income effect, social – through information flow and political – through aid flow, effects result in better LE and IMR.

Thus, literature on the impact of globalization on health status across countries is inconclusive in general and particularly for underdeveloped countries. The present study is an attempt to check the experience of all countries in this regard. The present study aims to do the same with following research questions:

Research Question 1: Does globalization have any impact on the health status of countries? – If there is some impact, which dimension of globalization has the most influence on health?

Research Question 2: Does globalization affect the health status of countries with different levels of development status differently?

Data and methodology

The current study uses panel data method to evaluate the association between globalization and health. It uses data from around 160 countries from the years 1995 to 2011.

The indicators used as dependent variables, depicting health status, are IMR and LE. These are the frequently used indicators for health status (Davies and Quinlivan, 2006; Deaton, 2004; Hitris and Posnett, 1992; Levine and Rothman, 2006; Owen and Wu, 2007; Pritchett and Summers, 1993; Umaña-Peña et al., 2014). The source for these health indicators is World Development Indicators database of the World Bank (n.d.).

For globalization, KOF globalization index (Dreher, 2006) is used. It has across-countries indices on economic globalization, social globalization and political globalization. Based on these three, it also has a comprehensive globalization index for each country.

For controlling effects of income, health system and other development measures, the following control variables are used: per capita GDP, per capita healthcare expenditure, out-of-pocket health expenditure as percentage of total health expenditure, education index and percentage of population covered with sanitation facilities. GDP per capita and health expenditure per capita have been transformed into constant price (2005) values. In addition, the effect of pollution is controlled by considering per capita carbon dioxide emission as a control variable.

The basic model to be used for panel data analysis is as follows:

Health status = f(globalization/liberalization, per capita GDP, per capita health expenditure, educational status, population covered with sanitation facilities, pollution)

H_{i t} = β_{0} + \sum_{k = 1}^{k = k} β_{k} X_{i t k} + \sum_{m = 1}^{m = m} α_{m} Z_{i t m} + a_{i} + u_{i t}

(1)

where H_it is the natural log of Health indicator (IMR/LE) of ith country for the tth time period; X_itk is the natural log of independent variable(s) used for globalization if they are not in percentage terms; Z_itm is the natural log of relevant control variables like real GDP per capita, literacy level, real healthcare expenditure per capita, and so forth; Z_itm also includes percentage of population having access to sanitation which is used without natural log; a_i is the unobserved time invariant individual effects; and u_it is the error term.

The panel data are tested for fixed effects vis-à-vis random effects using the Hausman (1978) test which showed that the fixed effects model was more appropriate. After this, data are tested for heteroskedasticity, autocorrelation and cross-sectional dependence using Modified Wald test for group-wise heteroskedasticity (Baum, 2006), Woolridge’s test for auto correlation (Drukker, 2003; Wooldridge, 2002) and Pesaran (2004) test, respectively. These tests showed that the group-wise heteroskedasticity, first-order correlation and cross-sectional dependence are present in the panel data. These complexities are required to be taken care of before using fixed effects model. For this, Driscoll and Kraay (1998) standard errors (Hoechle, 2007) have been estimated to make hypothesis testing robust to complexities involved in the data. This method modifies error variance–covariance matrix, taking into account heteroskedasticity, serial correlation and cross-sectional dependence between panels.

For the second research question that intends to check whether the initial level of human development has any effect on the impact of globalization on health, the human development status of Year 1995 is used for each country. Two interaction dummy variables are introduced in the estimation model for the low human development and medium human development countries. These dummy variables are interacted with the globalization index value of that particular country in that particular year. The base case for this estimation is the high human development countries.

H_{i t} = β_{0} + \sum_{k = 1}^{k = k} β_{k} X_{i t k} + \sum_{m = 1}^{m = m} α_{m} Z_{i t m} + γ_{1} D_{L} + γ_{2} D_{M} + a_{i} + u_{i t}

(2)

In equation (2), D_L and D_M are interaction dummy variables. D_L would be equal to ith country’s globalization index value in tth year if the country’s human development status is low in Year 1995 as per the Human Development Report 1995. Similarly, D_M would be equal to the country’s globalization index value when the country has medium human development status as per the Human Development Report 1995 (United Nations Development Programme [UNDP], 1995). Similarly, interaction dummy for industrial development status – developed, developing and least developed – of a country is also introduced in a separate model.

Here, β₀ would show the level of health indicator without any impact from explanatory variable. However, β₁ would show the impact of globalization on the health status of high human development countries. It shows the rate of improvement in the health indicator due to globalization keeping all other factors constant. It is basically an elasticity of health improvement. The expressions $β_{1} + γ_{1}$ and $β_{1} + γ_{2}$ would show the impact of globalization on the health status of low human development countries and medium human development countries, respectively, in elasticity terms. This exercise would show, in comparison with high human development countries, how low human development and medium human development countries are doing in terms of garnering the health benefits from the process of globalization.

Results and discussion

In this section, three different results have been discussed. Tables 1 and 2 discuss impact of globalization index on the IMR and LE, respectively. Models 1 and 2 in both tables include all countries across the world. Models 3 and 4, Models 5 and 6 and Models 7 and 8 include only industrial countries, developing countries and low development countries, respectively. The main explanatory variable for Models 1, 3, 5 and 7, in both the tables, is globalization index – in natural log form. Whereas, in the rest of the models, there are three explanatory variables: economic, social and political globalization indices. As per KOF globalization index, these three components form the composite globalization index score.

Table 1.

Globalization and infant mortality rates – world- and development-based groupings of countries.

	World		Industrial countries		Developing countries		Least developed countries
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	lnimr	lnimr	lnimr	lnimr	lnimr	lnimr	lnimr	lnimr
ln(globalization index)	−0.5990***		−0.4470***		−0.4510***		−0.5410***
ln(globalization index)	(0.0726)		(0.0792)		(0.0911)		(0.0736)
ln(economic globalization)		−0.2630***		0.0694*		−0.1580***		−0.2900***
ln(economic globalization)		(0.0407)		(0.0409)		(0.0337)		(0.0534)
ln(social globalization)		−0.0202		−0.3450***		−0.0960**		0.1010*
ln(social globalization)		(0.0237)		(0.0966)		(0.0367)		(0.0518)
ln(political globalization)		−0.1910***		−0.1830**		−0.142**		−0.1880***
ln(political globalization)		(0.0494)		(0.0694)		(0.0632)		(0.0264)
ln(GDP per capita)	−0.4790***	−0.5230***	−0.5940***	−0.5750***	−0.3290***	−0.3920***	−0.1300***	−0.0541
ln(GDP per capita)	(0.0142)	(0.0240)	(0.0704)	(0.0696)	(0.0216)	(0.0203)	(0.0203)	(0.0721)
ln(health expenditure per capita)	−0.0199*	−0.0145	−0.0292	−0.0352	0.0371**	0.0364**	−0.0239***	−0.0168***
ln(health expenditure per capita)	(0.0101)	(0.0094)	(0.0225)	(0.0290)	(0.0141)	(0.0154)	(0.0031)	(0.0024)
ln(education index)	−0.3630***	−0.4170***	−1.4250***	−1.4540***	−0.6820***	−0.6630***	−0.2300***	−0.1980***
ln(education index)	(0.0469)	(0.0467)	(0.3400)	(0.3750)	(0.1170)	(0.1040)	(0.0300)	(0.0419)
ln(CO₂ emission per capita)	0.0979***	0.1230***	0.1980**	0.1740**	0.0846***	0.0828***	0.0424*	0.05410***
ln(CO₂ emission per capita)	(0.0170)	(0.0175)	(0.0765)	(0.0758)	(0.0218)	(0.0252)	(0.0211)	(0.0136)
Access to sanitation (% of population)	−0.0036***	−0.0055***	0.0167***	0.0181**	−0.0121***	−0.0123***	−0.0092***	−0.0169***
Access to sanitation (% of population)	(0.0009)	(0.0009)	(0.0052)	(0.0067)	(0.0011)	(0.0009)	(0.0009)	(0.0018)
Out-of-pocket health expenditure (%)	0.0024***	0.0028***	0.0009	0.0018	0.0033***	0.0032***	0.0017*	0.0025*
Out-of-pocket health expenditure (%)	(0.0002)	(0.0002)	(0.0008)	(0.0011)	(0.0011)	(0.0011)	(0.0009)	(0.0013)
Access to drinking water (% of population)	−0.0011	−0.0012	−0.0010	0.0024	−0.0004	0.0002	−0.0045***	−0.0088***
Access to drinking water (% of population)	(0.0011)	(0.0014)	(0.0019)	(0.0025)	(0.0019)	(0.0015)	(0.0010)	(0.0011)
_cons	9.3140***	9.2750***	7.5100***	6.9720***	7.6880***	7.9990***	7.3640***	6.9210***
_cons	(0.3920)	(0.3340)	(0.4820)	(0.4640)	(0.4620)	(0.4420)	(0.3420)	(0.5620)
No. of countries	163	144	45	44	72	66	37	30

Development status in Model 3 to Model 8 is based on the Human Development Report 1995 (United Nations Development Programme [UNDP], 1995). IMR = infant mortality rate.

p < .1; **p < .05; ***p < .01.

Table 2.

Globalization and life expectancy – world- and development-based groupings of countries.

	World		Industrial countries		Developing countries		Least developed countries
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
	lnle	lnle	lnle	lnle	lnle	lnle	lnle	lnle
ln(globalization index)	0.0748***		0.0283***		0.0233*		0.1710***
ln(globalization index)	(0.0096)		(0.0090)		(0.0117)		(0.0242)
ln(economic globalization)		0.0397***		−0.01330**		0.0298***		0.0924***
ln(economic globalization)		(0.0088)		(0.0049)		(0.0069)		(0.0202)
ln(social globalization)		0.0136*		0.0368***		0.0129**		−0.0270
ln(social globalization)		(0.0069)		(0.0058)		(0.0045)		(0.0190)
ln(political globalization)		0.0097		0.0063		0.0272*		0.0519***
ln(political globalization)		(0.0066)		(0.0070)		(0.0132)		(0.0096)
ln(GDP per capita)	0.0198***	0.0255***	0.0419***	0.0426***	0.0285***	0.0324***	0.0407*	0.0434
ln(GDP per capita)	(0.0029)	(0.0035)	(0.0046)	(0.0044)	(0.0023)	(0.0024)	(0.0206)	(0.0341)
ln(health expenditure per capita)	0.0022***	0.0029***	0.0069***	0.0080***	−0.0028	−0.0006	0.0045**	0.0029
ln(health expenditure per capita)	(0.0006)	(0.0005)	(0.0019)	(0.0022)	(0.0021)	(0.0019)	(0.0018)	(0.0026)
ln(education index)	0.1160***	0.1200***	0.0804**	0.0755**	0.1360***	0.1370***	0.0630***	0.0582***
ln(education index)	(0.0105)	(0.0102)	(0.0313)	(0.0304)	(0.0161)	(0.0133)	(0.0053)	(0.0123)
ln(CO₂ emission per capita)	−0.0093***	−0.0129***	−0.0228**	−0.0214**	−0.0007	−0.0050	−0.0318***	−0.0383***
ln(CO₂ emission per capita)	(0.0022)	(0.0034)	(0.0095)	(0.0087)	(0.0032)	(0.0047)	(0.0084)	−0.0065
Access to sanitation (% of population)	0.0005	0.0004	−0.0005	−0.0008	−0.0008**	−0.0007**	0.0022*	0.0037**
Access to sanitation (% of population)	(0.0003)	(0.0004)	(0.0005)	(0.0005)	(0.0004)	(0.0003)	(0.0011)	(0.0015)
Out-of-pocket health expenditure (%)	−0.0003***	−0.0002***	−0.0002**	−0.0003**	−0.0000	0.0000	−0.0003***	−0.0004*
Out-of-pocket health expenditure (%)	(0.0001)	(0.0001)	(0.0001)	(0.0001)	(0.0000)	(0.0001)	(0.0001)	(0.0002)
Access to drinking water (% of population)	0.0009	0.0011	0.0002	0.0000	0.0006	0.0007	0.0007**	0.0020***
Access to drinking water (% of population)	(0.0005)	(0.0007)	(0.0003)	(0.0005)	(0.0009)	(0.0008)	(0.0003)	(0.0004)
_cons	3.7120***	3.6920***	3.8690***	3.8920***	3.9820***	3.9640***	3.0530***	3.0400***
_cons	(0.0646)	(0.0582)	(0.0413)	(0.0485)	(0.0954)	(0.0864)	(0.1330)	(0.1770)
No. of countries	160	144	45	44	72	66	37	30

Development status in Model 3 to Model 8 is based on the Human Development Report 1995 (United Nations Development Programme [UNDP], 1995). LE = life expectancy.

p < .1; **p < .05; ***p < .01.

Table 1 has eight models. Model 1 shows that at world level, when all countries are taken together, if there is a 10% increase in the globalization index score, their IMR would reduce by 5.99%. The 95% confidence interval for this estimation is reduction of 4.44% from 7.52%. This result is significant as the model controls for the income, education level, health system characteristics and access to sanitation and water. However, this result does not show which components of a complex process of globalization make significant impact on the IMR. This is shown by Model 2. It shows that economic and political components of the globalization process have significant impact on the reduction of IMR. Whereas, the social component has a negative sign that suggests that it contributes to the reduction of IMR but it is not statistically significant. Moreover, the economic globalization contributes the most to the improvement in IMR. This result corroborates with the studies of international trade being good for child health (Levine and Rothman, 2006). The Models 3 to 8 are for different groups of countries clubbed together. This exercise allows removing the assumption about homogeneity across countries. In first two models, the developed countries of Nordic region and underdeveloped countries of sub-Saharan Africa are assumed to be homogeneous. This assumption is not that strong an assumption as analysis is based on panel data method with fixed effects. However, it still is an assumption that needs to be taken care of. Here, the industrial development classification of Human Development Report 1995 (UNDP, 1995) has been used to classify countries. The three groups are industrial countries, developing countries and low development countries. The endeavour of this study is to check whether underdeveloped countries are getting benefits from globalization. And Model 7 precisely shows that. It shows, even if data from the least developed countries is analysed, and if there is 10% increase in globalization index score of a country, IMR reduces by 5.41%. This means that it will not be totally true if one argues that there is no gain for underdeveloped countries from the globalization. Models 3 and 5 show a similar result for the industrial countries and the developing countries. So the result of Model 1 holds true even when countries are split into different development-based groups. However, the interesting finding comes from Models 4, 6 and 8. Model 8 shows how different components of globalization affect the reduction rate of IMR for least developed countries. It shows that the economic component of the globalization is the most important component for these countries. There is less influence from social globalization. It means that the economic and political factors kick in before the society starts benefitting from the cross-cultural information flows and adaptation to modern lifestyle. The developing countries have contributions coming from all three components of the globalization. However, the most interesting point to note is that industrial countries get benefit in terms of IMR reduction from social globalization. Moreover, the higher the economic globalization industrial countries have, they would have their IMR getting affected negatively. This suggests that as countries move up the ladder of industrial development, importance attached to economic component of globalization gradually shifts to social globalization. It follows the pattern of first liberalization of trade and then, in the process, a country gets socially and politically integrated in larger global community.

Table 2 has similar models as Table 1. The main dependent variable in this table is LE. It by and large shows a similar result as Table 1.

Model 1 shows that, for all the countries put together, if a country’s globalization score increases by 10%, the LE would increase by 0.748%. This result about globalization elasticity of LE holds true across different development level–based country groupings in Models 3, 5 and 7. The interest group for this study is the least developed countries and Model 7 shows that with 10% increase in their globalization score, the LE in these countries would increase by more than 1%. This is similar to the result about impact of globalization on IMR in these countries. Dissecting the globalization score into its components, Model 2 shows that for improvement in LE, economic component of globalization is the most important component of complex globalization process. This corroborates evidence given in Table 1. The more interesting finding is that as one moves up the ladder of development, importance of economic dimension wanes and social dimension becomes more important for benefits in terms of health for countries.

Based on results shown in Tables 1 and 2, it is safe to say that all countries irrespective of the development status get health benefits from globalization. The dimension of globalization that is of more value for a country changes as per the development status of a country. As, for example, for the least development countries, majority of health benefits can be attributed to the economic dimension of the globalization process and for developed countries most benefits come from social dimension of the globalization. This is not to say that when one dimension is important, the other two dimensions are not resulting in benefits. So all three are important for countries, but majority of gains can be attributed to one of them. It resonates with the idea of societal development needs; once a society is economically stable, it is ready to accept social changes in a constructive manner. For the least developed countries, adopting Western culture, food habits and life style may be detrimental initially but with progress society becomes mature and capable to decide what is good and what is not beneficial.

To verify the argument about developed nations garnering majority of the benefits of globalization and that the divide between development in these countries and underdeveloped nations is widening, panel data analysis with introduction of interaction dummy for development status of a country is done. The result is shown in Table 3.

Table 3.

Globalization and health – comparison across countries with different initial levels of development status.

	Development status		Human development status
	(1)	(2)	(3)	(4)
	lnimr	lnle	lnimr	Lnle
ln(globalization index)–lngi	−0.9660***	0.0151	−1.3740***	0.0376***
ln(globalization index)–lngi	(0.1090)	(0.0133)	(0.1060)	(0.0088)
Least developed country dummy × lngi	0.6700***	0.1600***
Least developed country dummy × lngi	(0.0812)	(0.0194)
Developing country dummy × lngi	0.2660***	−0.0002
Developing country dummy × lngi	(0.0726)	(0.0224)
Low HD country dummy × lngi			1.1070***	0.1340***
Low HD country dummy × lngi			(0.0883)	(0.0127)
Medium HD country dummy × lngi			0.7330***	−0.0275***
Medium HD country dummy × lngi			(0.0474)	(0.0035)
ln(GDP per capita)	−0.3860***	0.0388***	−0.3910***	0.0374***
ln(GDP per capita)	(0.0135)	(0.0051)	(0.0214)	(0.0029)
ln(health expenditure per capita)	−0.0196**	0.0028***	−0.0169*	0.0031***
ln(health expenditure per capita)	(0.0087)	(0.0007)	(0.0073)	(0.0008)
ln(education index)	−0.4400***	0.0903***	−0.3990***	0.0856***
ln(education index)	(0.0646)	(0.0078)	(0.0526)	(0.0085)
ln(CO₂ emission per capita)	0.0859***	−0.0148***	0.0859***	−0.0135***
ln(CO₂ emission per capita)	(0.0152)	(0.0032)	(0.0135)	(0.0032)
Access to sanitation (% of population)	−0.0047***	0.0005	−0.0052***	0.0006
Access to sanitation (% of population)	(0.0009)	(0.0005)	(0.0008)	(0.0004)
Out-of-pocket health expenditure (%)	0.0029***	−0.0002**	0.0029***	−0.0002*
Out-of-pocket health expenditure (%)	(0.0003)	(0.0001)	(0.0003)	(0.0001)
Access to drinking water (% of population)	−0.0024*	0.0006	−0.0034***	0.0005
Access to drinking water (% of population)	(0.0011)	(0.0005)	(0.0008)	(0.0005)
_cons	9.0860***	3.6590***	9.8230***	3.6190***
_cons	(0.4350)	(0.0710)	(0.4170)	(0.0652)
No. of countries	154	154	154	154

Development and human development status in Model 1 to Model 4 is based on the Human Development Report 1995 (United Nations Development Programme [UNDP], 1995). IMR = infant mortality rate; LE = life expectancy; HD = human development; GI = globalization index.

p < .1;**p < .05; ***p < .01.

In Table 3, there are four models. Models 1 and 2 are for countries classified based on industrial development status in the Human Development Report 1995 (UNDP, 1995). Whereas Models 3 and 4 have countries classified as per human development status as per the same report. The main dependent variable for Models 1 and 3 is IMR and, for the other two models, it is LE. For the first two models, the base case is the industrial countries and for the next two models the base case is high human development countries.

Models 1 and 3 suggest that industrial developed or high human development countries are doing much better than their underdeveloped counterparts in garnering benefits from globalization to reduce IMRs. The same is true for LE. However, in case of LE, the least developed or low human development countries are doing better than the developing or the medium human development countries. This evidence is suggestive of a bigger divide being created between the countries on the forefront of development and underdeveloped countries. Even though developed countries’ IMR or LE is at a level where they have to put much more hard work to improve by a small percentage, they are garnering higher benefits from globalization compared with their underdeveloped counterparts. This exercise does not devalue the results of Tables 1 and 2 because even Table 3 shows that the least developed countries and countries with low human development status do manage to reduce IMR and increase LE due to higher globalization. However, the rate of improvement in health indicators for the least developed countries is not so high as industrial countries or countries with high human development. If this rate is not kept in check, the divide would be widening as the time passes. That the industrial country still benefits from globalization heavily compared with the underdeveloped world is because if they increase even a percentage in their globalization score, the absolute amount of integration a country has is humongous because of the base effect. And other aspect is related to systems in place that make these benefits percolate to the lower most strata of that community and redistribution happens homogenously across the society. Whereas, in case of the least developed countries, the rate of improvement is not matching the rate of developed nations because of the lack of systems that make these gains trickle down to the neediest. Initially, these countries draw benefits from the economic globalization that inherently accrue to the higher stratum of the society. However, with progress, a country needs to build its redistributive system that makes sure that everyone benefits. As the poorest of the poor sometimes get left out of this process, the health indicators are improving at a slower rate. Most of the population-level health indicators get influenced when the health of this lower stratum changes as they form the majority of the population in the underdeveloped country.

Conclusion

The world is getting integrated more and more with advent of newer technologies. As it always happens, not all are running at the same pace. However, in a larger global perspective, it is not a race to defeat someone. It is a process of cumulative progress of the human race. We all are connected and all have to move ahead. So it is very apt to embrace the need to be integrated. However, there are cons attached to this irreversible process of globalization. It should not happen that the developed world is developing using resources of the underdeveloped world without making sure that the underdeveloped world is also progressing.

This study is aimed to identify the impact globalization has on the health status of a country. Moreover, it checks if there is any impact of a country’s development status on the ability of a country to garner health benefits from globalization. Health, being an important measure of human development, works as a good proxy for overall socio-economic development.

Globalization has a positive impact on the health status. This result holds by and large true across regions and development status, but the rate of impact is varying. When put into the same analysis model, high income/high human development/industrial countries have higher positive impact of globalization process as a whole on their health status. However, when further dissection is done, it is found that the main driver behind their experience of this positive impact is not the economic component but that the social dimension and somewhat the political component of the globalization process have helped them. This is because once a country attains a certain level of development and her per capita income rises above a level, citizens are not worried about the subsistence and they may invest more in their own development. They have access to better education, health and infrastructure that may have positive externalities attached and information flow without boundaries make them adopt best practices in an informed manner. However, for low human development/low income/low development countries highest impact stems from the economic dimension of the globalization. The political dimension of globalization, which works mostly through multilateral development agencies and aid, also plays an important role. This is because, initially, most of the poor population do not even have access to health. With economic globalization, a country gets infrastructure built and just having access to primary healthcare makes a tangible impact on the health of this population. These countries are not able to leverage social dimension as well as developed countries due to differences in level of literacy, information technology penetration in their lives and leisure time at disposal. Once the majority of the population of a country gets to a level where they are not any more worried about their daily subsistence, the social integration and information flow has exponential impact on their well-being. The medium group countries seem to have stagnated in terms of garnering more benefits out of economic globalization and have not been able to convert positives emanating from the other two components, namely, social and political globalization process yet.

Apart from globalization, per capita income, health system characteristics, literacy level, pollution and access to sanitation and drinking water have impact on health. Based on the positive and negative impact, they need to be dealt with during policy making. Income inequality also plays an important role in affecting the ability of garnering benefits of globalization. However, due to lack of longitudinal data availability on this parameter, it is not part of this study. It may be good to explore this in future.

In a nutshell, the most important dimension for the countries that are starting their development journey is economic globalization and as one steps up the development ladder the impact of the social dimension increases.

Footnotes

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Vishalkumar J Jani

Author biographies

Vishalkumar J Jani He is an Assistant Professor in Economics area at IM, Nirma University. He is a dentist with an expertise in Health Economics, Managerial Economics and Globalization. He has doctorate from IIM Ahmedabad, MBA from IRMA, Anand and BDS from Gujarat University.

Nisarg A Joshi He is an Assistant Professor in Finance area at IM, Nirma University. His expertise include Derivatives, International Finance, Portfolio Management and Time-series Analysis. He has doctorate and MBA from Gujarat University.

Dhyani J Mehta He is an Assistant Professor in Economics area at IM, Nirma University. He is an expert in Econometrics and Public Finance. He has MBA and PhD (pursuing) from Nirm.

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