Within a few decades following the end of the Second World War, Germany moved from a country of middling wealth per capita to one of the wealthiest countries in the world. In the meantime, the Japanese, very poor indeed in 1945 in spite of a strong showing in terms of industrialisation and technology, joined that select club only about a decade after the Germans. At the same time, Germans and Japanese became in general more economically equal. This is reflected in the rise of consumerism in both countries, and increasingly the nations’ affluent consumers showed no hesitation whatsoever in purchasing domestically manufactured white goods and many other products. In doing so, they helped power the countries’ respective economic miracles. Moreover, their purchases and savings also made the companies that produced the goods more financially secure while at the same time enabling increasing levels of technological capability. This provided a sound basis for those firms to move ever more aggressively into export markets by the end of the first quarter-century after the war’s end. West Germany forged into these export markets earlier than the Japanese, who were less reliant on export for growth.

Did augmented human development improve in Latin America since 1870, what drove it, and did the gap with the OECD widen? Chapter 5 addresses these questions. Latin America presents sustained AHD gains since the late nineteenth century, especially during the 1940s and 1950s and from 1970 onwards, the 1980s in particular. AHD advance was not restricted to phases of economic progress, i.e., the 1940–1980 phase of state-led growth, but extended to the globalisation backlash (1914–1950) and the ‘lost decade’ (1980s). Schooling, as a result of the diffusion of new ideas, nation-building, and urbanisation, and life expectancy, due to the spread of the epidemiological transition, drove AHD over the long run and accounted for catching up to the OECD until 1960, while civil and political liberties did so in the 1980s. The rise of life expectancy before drugs spread internationally since 1950 points to the diffusion of new medical knowledge that through hygienic practices and low-cost public health measures helped eradicating communicable diseases and played a major role in reducing infant and maternal mortality.

Chapter 6 assesses long-run augmented human development in Africa. Augmented human development experienced sustained gains since 1880, faster between 1920 and 1960, under colonial rule, and at the turn of the century, but remains at the bottom of the world distribution, although the northern and southern regions forged ahead while the rest stayed behind. AHD grew twice as much as per capita GDP, thriving at times of poor economic performance and, unlike GDP per head that fell behind from a higher relative position, AHD was catching up to the OECD since the late 1920s. Schooling was the main driver of AHD gains and catching up, with life expectancy making a significant contribution in the interwar in the early stage of the epidemiological transition, as the diffusion of health practices prevented infectious disease spread and helped reduce infant and maternal mortality. Civil and political liberties made a contribution both at the time of independence and in the 1990s. AHD long-run performance does not support either the pessimistic view of the colonial era or the depiction of ‘lost decades’ for the post-independence era, but there is still a long way to go from an international perspective

Chapter 4 investigates Augmented Human Development across world regions and focuses on the differences between advanced countries (the OECD) and the rest of the world over time. It takes a closer look at world regions, examining the contribution of each dimension to AHD gains and how they affect world distribution. Finally, it investigates catching up to the OECD in the regions of the Rest and what drives it. Augmented human development achieved substantial but unevenly distributed gains across world regions. Life expectancy and schooling drove AHD in both the OECD and the Rest. Although the absolute gap between the OECD and the Rest deepened over time, the gap shrank in relative terms since the late 1920s, at odds with the increasing relative gap in terms of GDP per head. The gap between the OECD and the Rest dominated AHD international distribution until the mid-twentieth century. Life expectancy and civil and political rights were its main drivers of the Rest’s catching up to the OECD. Up to 1970, stronger catching up took place up to 1970, as the epidemiological transition spread and, again, in the 1990s, when liberties expanded in the Rest.

After the Meiji Restoration of 1868, Japan introduced Western institutions and new technologies. As the first Asian economy to make the transformation to ‘modern economic growth’, Japan’s development process was not smooth, and it took until the 1970s to achieve the goal of catching up with Western economies. From a supply-side perspective, the main drivers of economic growth to the 1970s were capital accumulation and TFP growth. From a demand-side perspective, private and government investment played a more significant role than private consumption. After the high-speed growth era, investment and TFP growth slowed down and exports took centre stage in propelling the economy forward. Further, especially since the 1990s, some features that played a key role in Japan’s remarkable economic performance, such as lifetime employment, the dual economy, and the high saving rate, held back Japan. Also, globalization and slow/negative growth in the working-age population have posed new challenges.