The Effect Of Trade On Human Development

Trade is intrinsically linked to Human Development,which is a better environment for people to live.An open economic and political environment has a positive impact on human development.This paper studies the relationship between the development of human capital and two different trade patterns,and uses the linear regression model to conduct the analysis.Based on the analysis of the two hypotheses,the Human Development Index rises when exports and services grow in Pakistan and Bangladesh.The second assumption is that import growth will promote a higher human development index.Both hypotheses are tested using a regression model and the data results are found to be significant.The controlling variables are GDP,Government Investment in Education,and Public Expenditure on Health.These variables will make the model more robust.The conclusion of this paper is that trade has a positive effect on the Human Development Index for the following reasons;higher levels of trade increase the income of people,which in turn means that people are able to spend it on human development goods such as nutrition and health.An indirect link is also present between the two variables;imports and exports.They are also causal factors in the increase of technology and innovative skills held by the population.People become more aware of new technologies,new trends,and newer ways to use existing products.This also leads to a condition wherein the human development index of the nation rises.Higher trade results in an increase in the availability(and variety)of products,people have more choice.This availability of choice causes a direct increase in human development as people now choose wisely.It also increases the range of choice,since people may choose newer products or newer brands that they could not purchase before increased levels of trade.Therefore,the Human Development Index and National Trade Increase are closely linked,having a positive impact on each other.Countries with slower human capital development should focus on more liberal trade policies.This will enable human capital to grow healthily and eventually promote the country's economic development.