Linking Water, Human Development and Economic Growth: Building Empirical Evidence Using Global Datasets

In this paper, the authors analyze the nature of linkage between water situation of a country, vis-à-vis its access and use, water environment and institutional capabilities in the water sector, and its economic growth. In order o realistically assess the water situation of a country, a new index ‘Sustainable Water Use Index’ (SWUI) was derived from Water Poverty Index (WPI). For the analysis, data on SWUI derived from WPI, human development index (HDI) and per capita GDP for 145 countries, and global hunger index (GHI) for 117 countries are used. Analysis showed that improved water situation in a country can drive economic growth through the human development route as indicated by the strong correlation between SWUI and per capita GDP, and SWUI & HDI. The strong linkage between SWUI and HDI is explained by the reduction in malnutrition and infant mortality with improvement in water situation.