The Spillover Effects of Free Movement of Capital on Human Development Sub-index

Since the Free movement of capital has disparate effects on the different countries’ Economy(according to their degree of development), main purpose of this study is to answer the question, whether the increased free movement of capital is an effective tool to improve social welfare in the selection of the OIC member states or not. For this purpose, the Human Development Index is used as a measure of social welfare. Data have been obtained from 17 countries of the OIC in the period 2014-2000. The results for the total sample indicated that the effect of Free movement of capital on human development, and its components are statistically significant. The impact of foreign aids on human development and education are statistically insignificant, and the effects on life expectancy and quality of life are significantly negative. Gross domestic savings effect is positive in all the models. The effect of governance on human development, living standards, and life expectancy has been positive and the training has been positive and statistically insignificant. The net effect of the logarithm of initial GDP (as a measure of economic growth over time) on human development and life expectancy is negative, and the other two are not statistically significant.