Child Stunting and Economic Outcomes in SAARC Countries: The Empirical Evidence

Abstract

Abstract Background Stunting and its economic consequences are gaining increased awareness. As healthy human capital is the key to higher economic growth in the country, according to UNICEF’s report in 2018, almost 40% of the total stunted population lives in this South Asian region. Because of the long-term implications, this is of great concern to local and international health organizations and agencies. Method This study explores the causal relationship between the socio-economic determinants of child stunting prevalence under 5 years of age in SAARC countries by constructing fixed-effect modelling and the two-stage least square (2SLS) model using instrumental variables; urbanization, governance stability index, and rainfall and temperature anomalies with the GDP per capita variable from 1984 to 2018. Results The results reveal that both the variables have a significant causal influence on each other. A 10% rise in gross domestic product per capita reduces child stunting to 6%, implying that economic expansion in this region is presumptively pro-poor. A 1% increase in childhood stunting results in a 3.4% drop in the region's current GDP per capita. The results lie under the critical bound at a 1% level of significance. Conclusion The study urges the governments of the SAARC countries to adopt pro-poor policies with an effective mechanism for economic growth transition in the targeted area.