Physical height is an important economic variable reflecting health and human capital. Puzzlingly, however, differences in average height across developing countries are not well explained by differences in wealth. In particular, children in India are shorter, on average, than children in Africa who are poorer, on average, a paradox called “the Asian enigma” which has received much attention from economists.
This paper provides the first documentation of a quantitatively important gradient between child height and sanitation that can statistically explain a large fraction of international height differences. This association between sanitation and human capital is robustly stable, even after accounting for other heterogeneity, such as in GDP. The author applies three complementary empirical strategies to identify the association between sanitation and child height: country-level regressions across 140 country-years in 65 developing countries; within-country analysis of differences over time within Indian districts; and econometric decomposition of the India-Africa height differences in child-level data. Open defecation, which is exceptionally widespread in India, can account for much or all of the excess stunting in India.