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The Human Capital Gap

Getting Governments to Invest in People

Teach your children well: a teacher in northeastern Nigeria, June 2017 AKINTUNDE AKINLEYE / REUTERS

Governments in pursuit of economic growth love to invest in physical capital—new roads, beautiful bridges, gleaming airports, and other infrastructure. But they are typically far less interested in investing in human capital, which is the sum total of a population’s health, skills, knowledge, experience, and habits. That’s a mistake, because neglecting investments in human capital can dramatically weaken a country’s competitiveness in a rapidly changing world, one in which economies need ever-increasing amounts of talent to sustain growth.

Throughout the World Bank Group’s history, our development experts have studied every aspect of what makes economies grow, what helps people lift themselves out of poverty, and how developing countries can invest in prosperity. In 2003, the bank published the first annual Doing Business report, which ranked countries on everything from taxation levels to contract enforcement. The findings proved hard to ignore: heads of state and finance ministers

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