Beyond Bigger Budgets: Why Public Spending Alone Cannot Deliver Human Development

Public expenditure remains one of the clearest signals of government commitment to health, education and social development. However, a long-term comparison of Canada, Malaysia and South Africa suggests that higher spending does not automatically produce stronger development outcomes. The study, "Beyond Fiscal Commitment: Public Management and Human Development Trajectories in Canada, Malaysia and South Africa," by Raphael Tabani Mpofu of the University of South Africa, was published in Administrative Sciences in October 2026.

Covering more than three decades of change, the research examines how public expenditure, institutional conditions and human development outcomes evolved in relation to Sustainable Development Goals 3, 4, 8 and 16. It argues that fiscal commitment is necessary, yet the developmental return on that commitment depends on how resources interact with institutions, implementation systems, economic conditions and starting levels of development.

Canada, Malaysia and South Africa followed sharply different trajectories. Canada retained the strongest institutional and human-development position, Malaysia narrowed several development gaps despite comparatively modest spending ratios, and South Africa achieved important gains in schooling and infant mortality while continuing to struggle with life expectancy, unemployment and selected governance indicators.

More Spending Did Not Produce a Common Development Path

The study tracks annual data from 1990 to 2024, with health expenditure available from 2000 to 2023. It brings together indicators on health and education spending, life expectancy, infant mortality, schooling, human development, governance, income, urbanisation and unemployment to examine how public finance and outcomes changed over time.

Health expenditure increased in all three countries, but the scale of growth varied considerably. South Africa recorded the largest rise between 2000 and 2023, increasing government health expenditure as a share of GDP by 104.5%, followed by Malaysia at 68.8% and Canada at 30.9%. Canada nevertheless maintained the highest average health expenditure level, while Malaysia remained the lowest spender of the three.

Health outcomes did not move proportionately with those increases. Malaysia improved life expectancy despite comparatively low expenditure, while South Africa's large rise in spending coincided with a much more uneven life-expectancy trajectory. Canada retained the strongest health position overall, but gains were more limited because it began from a much higher baseline.

Infant mortality produced a different pattern. South Africa recorded the largest proportional decline, at 53.6%, followed by Malaysia at 43.5% and Canada at 30.9%. The narrowing of infant mortality gaps across all three country pairs shows that meaningful convergence can occur in one health indicator even when other indicators, such as life expectancy, continue to diverge.

Malaysia and South Africa Reveal Two Very Different Roads to Progress

Malaysia stands out for the breadth of its convergence. Expected years of schooling rose by 21% between 1990 and 2023, while mean years of schooling increased by 80.4%, even as government education expenditure as a share of GDP declined by about 29%.

The study does not interpret this as evidence that Malaysia necessarily used resources more efficiently. Spending as a share of GDP does not reveal resources per learner, expenditure composition, demographic pressures, service quality or equity. The pattern instead demonstrates how weakly a single fiscal ratio can explain long-term educational progress.

South Africa moved in the opposite spending direction. Government education expenditure increased by roughly 31%, while mean years of schooling rose by 73.3% and expected years of schooling by 15%. The country therefore made substantial progress in educational attainment while committing a larger share of national output to the sector.

Broader structural conditions, however, separated South Africa from Malaysia. South Africa's unemployment gap widened markedly relative to both Canada and Malaysia, while its income performance also diverged. The country simultaneously recorded social gains and persistent weaknesses in employment and governance, illustrating how improvements in one part of the development system can coexist with deterioration or stagnation elsewhere.

Malaysia narrowed its income gap with Canada and sustained low unemployment alongside improvements in health, education and selected governance measures. The contrast between Malaysia and South Africa is particularly significant because the two countries began with relatively similar Human Development Index levels in 1990 but followed increasingly different trajectories thereafter.

The Policy Challenge Is Not Budget Size but Resource Conversion

The findings challenge a familiar habit in public policy: treating expenditure levels as a proxy for achievement. Budget shares show how much fiscal priority a government assigns to a sector, but they do not reveal whether money reaches intended beneficiaries, whether services improve or whether outcomes become more equitable.

Health systems require more than higher allocations. The study argues that spending should be assessed alongside primary and preventive care, maternal and child health, workforce capacity, service coverage and institutional capability. A rising health budget during a crisis may reflect greater pressure on the system rather than evidence of better performance.

Education requires the same caution. Years of schooling capture participation and accumulated attainment, but they do not measure learning quality, inclusion, completion or equity. Governments can expand schooling while still facing serious weaknesses in educational quality or unequal access.

Institutional capacity becomes crucial once expenditure is viewed as an input rather than an outcome. Credible budgeting, transparent procurement, operational capacity, performance reporting and independent oversight influence how public money is converted into services. The research does not prove that stronger institutions caused better outcomes, but it shows that fiscal trajectories unfolded within very different institutional environments.

South Africa also highlights the need to connect social expenditure with employment and income. Stronger educational attainment cannot deliver its full economic value if labour-market opportunities remain weak. The study supports a more integrated approach linking health, education, employment, governance and institutional capability rather than treating each development goal in isolation.

Human Development Converged Unevenly, and That Is the Bigger Lesson

One of the most useful insights from the research is the distinction between absolute improvement and convergence. A country can improve significantly and still fall further behind a comparator. Another can record only modest gains while remaining far ahead because it began from a much stronger position.

The Human Development Index captures this divergence particularly clearly. Between 1990 and 2023, HDI increased from 0.865 to 0.939 in Canada, from 0.653 to 0.819 in Malaysia and from 0.633 to 0.741 in South Africa. Malaysia narrowed its gap with Canada while increasing its lead over South Africa.

Canada's trajectory reflects the slower gains that often accompany already high levels of development. Malaysia's record shows broad convergence across multiple domains despite relatively low or declining expenditure shares in some sectors. South Africa demonstrates how rising expenditure and real social progress can coexist with structural and institutional constraints that slow wider development.

The study also strengthens its descriptive conclusions by testing whether its convergence classifications depended heavily on single starting or ending years. Thirty-eight of 39 bilateral comparisons retained the same classification after the researchers replaced individual endpoints with averaged endpoints, suggesting that most of the observed patterns were not simply the result of isolated annual fluctuations.

Important limits remain. The three-country design is deliberately comparative rather than representative, national averages can obscure subnational and socioeconomic inequalities, and expenditure ratios do not capture spending composition, efficiency or public-private differences. The analysis is descriptive, so it cannot establish whether governance, allocation choices or institutional capacity caused the observed outcomes.

For countries pursuing the SDGs, especially those facing tight fiscal space, the findings point toward a more demanding standard of public management. Progress depends not only on budget commitment but also on the institutions, delivery systems and economic conditions that determine whether spending becomes measurable human development.