A considerable literature has studied the association between health and economic development, with the latter usually measured in levels or changes of gross domestic product (GDP) per capita. One of the first attempts to explain the co-movement of the two variables can be found in Preston [55], who plots life expectancy against GDP per capita in 1900, 1930 and 1960. He finds that the relationship is non-linear in income per capita, with the relationship weakening as incomes rise, and that it has shifted upwards between 1930 and 1960.

The relationship, confirmed in subsequent analyses [56] and reproduced in Figure 1 with more recent data, provided new stimulus to long-standing debates on the relative importance of improvements in living standards and public health interventions as determinants of secular declines in mortality [29,31,34,51,67]. On the one hand, the decreasing slope of Preston curves suggests that, at low income levels, further income growth readily translates into greater survival (in contrast to higher income levels). On the other hand, at low income levels, the curve also displays a larger upward shift across time, suggesting a strong role for factors not tightly linked to income growth. While the first feature is consistent with an emphasis on resource availability per se, the second supports arguments stressing specific uses of resources and the cultural and institutional forces that make these uses possible. What remains in the background, however, is the possibility of a reverse causal effect from health to GDP.

Note: the same 79 countries are included in the sample for both years. Countries with population below 0.5 million excluded. Prediction lines from local regressions [27] with 0.35 bandwidth.

Initial attempts to tackle the issue of causality maintained the focus on the effect of income on health – like Pritchett and Summers (1996), who employed indicators related to trade, investment, and the exchange rate as instrumental variables, in an attempt to identify exogenous variation in income growth. Subsequently, the focus has shifted towards understanding the effect of health on income, which is the interest of this review. Early studies on the impact of health on income generally found a strong positive association between health and economic performance [8,19,21,22,25,59].

More recently, the literature has challenged the causal interpretation of these findings, advancing the possibility that it may be caused by omitted or poorly measured factors, which either confound or mediate a large part of the association, for example institutions [30]. For instance, Acemoglu et al. (2001) argue that, throughout centuries of European expansion, high settlers’ mortality discouraged large settlements and instead stimulated ‘extractive’ colonial governments, unaccountable to local commercial interests and therefore lacking incentives to develop the property rights and financial markets deemed conductive to long-run growth [2]. Limited to the post-war period, Caldwell's (1986) analysis of countries that achieved large mortality reductions at low income levels identified local traditions of grass-roots political activism, women's autonomy and appreciation for secular education as cultural preconditions for efficient healthcare delivery. These mediating factors are a challenge for establishing causality, as epitomized by contradictory findings in influential studies, such as those by Acemoglu and Johnson [[3](2007], who report a negative effect of health on economic development, and by Lorentzen, McMillan, and Wacziarg (LMW) (2008), who find a positive impact.

Moreover, the theoretical landscape is also complex, and results often face multiple possible interpretations. Healthier populations may catalyze economic performance by raising the value of investment in human and physical capital – both recognized drivers of sustained economic expansion [49]. However, reduced mortality rates, especially if unaccompanied by a timely and strong decline in fertility, can precipitate fast population growth, potentially diluting capital per worker and, in turn, income per capita. In other words, improvements in population health contribute to economic growth only if they do not trigger a Malthusian response (which refers to the scenario where population growth outpaces agricultural production, leading to poverty and famine, as theorized by Thomas Malthus).

This “macro” view complements the “micro” focus on individual or household level economic (and especially labour market) effects of health in a companion paper (Pinna Pintor et al., forthcoming). The latter provides an up-to-date, global review of the substantive findings in the existing literature, while again acknowledging the methodological challenges in assessing causality – challenges that arguable can be addressed more effectively with individual level data compared to country-level, “macro” data. The present macroeconomic review critically evaluates the existing empirical evidence focusing on studies that have tried to identify a causal effect; in doing so, the review also elaborates on the heterogeneity of results that has sparked a vigorous academic debate. We aim to synthesize the findings from a multitude of approaches, including cross-sectional and longitudinal analyses, to provide a cohesive understanding of the impact of health (systems) on economic growth, here understood as growth in GDP per capita. By examining differences in the evidence between pre- and post-demographic transition countries, the review also explores the ways in which the health-economy nexus evolves over different stages of economic development.

Identifying the causal effect of health on economic growth is essential to evidence-based policy-making. While the association has been extensively documented, the direction and magnitude of this relationship remain contested. In line with the topic of this special issue, we are interested in assessing the case for, and eventual scope of, “co-benefits” to country-wide investments in health and health systems. The ultimate goal is to furnish a comprehensive picture of the current state of knowledge on the causal relationship between health and economic growth, distilling insights that can guide policymakers in crafting interventions that harness the potential of improved health to foster economic development.