Economic growth and human development – what do time series data say for Sudan?

This study examines United Nations Development Programme (UNDP)'s 1996 hypothesis regarding the existence of a two-way relationship between economic growth (EG) and human development (HD) using Sudanese time series data (1960–2012). The hypothesis suggests that there is a feedback effect between HD and EG. This implies that improving HD could enhance EG opportunities and vice versa. In this study, first we analyse the long-run cointegration relationships using the Autoregressive Distributed Lag (ARDL) approach. Then, to identify the short-run dynamic relationship between HD and EG, we employ the error correction model derived from the ARDL. The results show that in the long run, HD is positively related to EG through education and employment performance channels. At the same time, EG could positively improve the opportunities for the education of households and involvement in economic activities. The short-run dynamic estimation confirms that there is a bidirectional relationship between EG and HD. The overall findings support UNDP's 1996 hypothesis concerning the existence of a two-way relationship between EG and HD. The results also confirm that improving humanity in Sudan promotes not only HD but also overall economic development.