Relationship between human development index and public expenditures

Whether economic growth directly translates into social welfare remains a key debate in economic literature. Public expenditures, particularly those directed towards education and healthcare, have the potential to enhance human development by improving individuals' quality of life. This study empirically examines the impact of public expenditures on human development in BRICS-T countries (Brazil, Russia, India, China, South Africa, and Turkey). To determine the effect of public spending on HDI, control variables such as per capita income, years of schooling, inflation, unemployment, and urbanization are included in the model. Using a panel data approach, the findings indicate that public expenditures have a positive and significant effect on human development. Education and healthcare expenditures play a key role in increasing HDI, yet their impact varies across countries. Additionally, while economic growth contributes to human development, it is found to be insufficient on its own and must be supported by public policies. The results highlight the critical role of efficient and sustainable public expenditure management in fostering human development. Policy recommendations emphasize allocating public expenditures to education and healthcare, ensuring spending efficiency, and maintaining macroeconomic stability. This study underscores that public expenditures should not only focus on stimulating economic growth but also on improving social welfare and the quality of life for individuals.