Road Deaths and Injuries Hold Back Economic Growth in Developing Countries
World Bank report, funded by Bloomberg Philanthropies, models economic growth and welfare benefits of better road safety in China, India, the Philippines, Tanzania and Thailand
- Cutting traffic deaths and injuries by half could add 7 to 22 percent to GDP per capita over 24 years in select countries
- Welfare benefits equivalent to 6 to 32 percent of GDP per capita could be realized over the same period if traffic deaths and injuries were halved
- Road traffic injuries are the single largest cause of mortality and long-term disability among people aged 15-29, prime working age
WASHINGTON, D.C. – A new World Bank study, funded by Bloomberg Philanthropies, finds that reducing road traffic deaths and injuries could result in substantial long-term income gains for low- and middle-income countries. The report, “The High Toll of Traffic Injuries: Unacceptable and Preventable,” introduces a new global methodology to calculate the economic impact of road safety and analyses the cases of China, India, the Philippines, Tanzania and Thailand.
While there is general recognition of road traffic injuries and fatalities, little is known about the link between road traffic injuries and economic growth. The new report quantifies how investments in road safety are also an investment in human capital.
The study finds that countries that do not invest in road safety could miss out on anywhere between 7 and 22 percent in potential per capita GDP growth over a 24-year period. This requires policymakers to prioritize proven investments in road safety. The cost of inaction is more than 1.25 million deaths a year globally, diminished productivity and reduced growth prospects.
Traffic Fatalities Strike Prime Working Age Adults in Low- and Middle-Income Countries (LMICs)
Road traffic fatalities disproportionately affect low- and middle-income countries, where 90 percent of global road deaths occur. Rising incomes in many developing countries have led to rapid motorization, while road safety management and regulations have not kept pace.
Death rates from road traffic injuries are high in LMICs – in 2015, reaching 34 per 100,000 in the countries studied. By contrast, the average across the 35 countries of the Organization for Economic Cooperation and Development (OECD) in the same year was 8 deaths per 100,000.
The greatest share of mortality and long-term disability from road traffic crashes happen amongst the working-age population (between 15 and 64 years old).
Reducing Road Traffic Deaths and Injuries Can Boost Income Growth
According to the report, deaths and injuries from road traffic crashes affect medium- and long-term growth prospects by removing prime age adults from the work force, and reducing productivity due to the burden of injuries.
Using detailed data on deaths and economic indicators from 135 countries, the study estimates that, on average, a 10 percent reduction in road traffic deaths raises per capita real GDP by 3.6 percent over a 24-year horizon.
Over the period 2014-38, halving deaths and injuries due to road traffic could potentially add 22 percent to GDP per capita in Thailand, 15 percent in China, 14 percent in India, 7 percent in the Philippines and 7 percent in Tanzania.
Large Welfare Gains from Proven Cost-Effective Road Safety Interventions
In addition to the GDP gains from preventing death and injury, road safety interventions improve welfare benefits to the society.
The World Bank study has quantified these gains for the five countries using a range of income and risk reduction scenarios. Measured in 2005 US dollars, the welfare gains range between $5,000 to $80,000 in Tanzania, and between $850,000 to $1.8 million in Thailand.
To achieve these welfare gains the report lists interventions that include reducing and enforcing speed limits, reducing driving under the influence of alcohol, increasing seat-belt use through enforcement and public awareness campaigns, and integrating road safety in in all phases of planning, design, and operation of road infrastructure.
Making the Macroeconomic Case for Road Safety
“Traffic crashes kill more than 1.25 million people around the world each year and they also take a huge economic toll, with so much human potential being lost. Investments in road safety pay for themselves many times over, and hopefully this new report will spur governments to take actions that save lives,” said Michael R. Bloomberg, philanthropist, three-term Mayor of New York City and entrepreneur.
“Inspired by disease impact studies, this it is one of the first systematic efforts to estimate both the potential economic benefits and aggregate social welfare gains of reducing road traffic injuries in low- and middle income countries,” said José Luis Irigoyen, World Bank Senior Director for Transport and ICT.
“Curbing road traffic injuries would not just be a victory for the transport sector but a significant milestone for global development, with immediate and far-reaching benefits for public health, wellbeing, and economic growth.”
Bloomberg Philanthropies Initiative for Global Road Safety has dedicated $259 million over 12 years to implement interventions that have been proven to reduce road traffic fatalities and injuries in low- and middle-income countries.
You can download the full report here.
About Bloomberg Philanthropies:
Bloomberg Philanthropies works in over 120 countries around the world to ensure better, longer lives for the greatest number of people. The organization focuses on five key areas for creating lasting change: Arts, Education, Environment, Government Innovation, and Public Health. Bloomberg Philanthropies encompasses all of Michael R. Bloomberg’s charitable activities, including his foundation and his personal giving. In 2017, Bloomberg Philanthropies distributed $702 million. For more information, please visit www.bloomberg.org or follow us on Facebook, Instagram, Snapchat, and Twitter.
About the World Bank’s Transport and ICT Global Practice:
The World Bank’s Transport and ICT Global Practice provides clients with physical and virtual connectivity solutions to facilitate the movement of people, goods and information, thus enabling access to food, jobs, health and education services, and stimulating economic and social development. The goal is to promote sustainable mobility around the world, focusing on four priority goals: improving the access of all to economic and social opportunities through greater mobility; increasing the efficiency of mobility solutions; improving the safety of mobility—to support the achievement of the SDG target of halving the number of global deaths and injuries from road traffic accidents; and responding to the climate imperative by reducing the carbon footprint of the sector and enhancing climate resilience. The World Bank currently has $57.7 billion in transport sector commitments in over 70 countries, representing almost 500 active projects. For more information please visit http://www.worldbank.org/en/topic/transport.