Pop/Dev Lecture 2 reading - 'Is population growth good or bad for economic development?' - Sean Fox https://www.theigc.org/blog/is-population-growth-good-or-bad-for-economic-development/ Part 1 . Malthus suggested that the only way to avoid a decrease in living standards would be 'moral restraint' from population growth, however he didn't foresee the technological advances that would raise agricultural productivity and reduce the toll of infectious diseases . These advances have enabled the world's population to grow from 1 billion in 1798 to 7.4 billion today. . The belief that rapid population growth diverts scarce capital away from savings and investment and therefore places a drag on economic development underpinned the major rise in funding for family planning in the 1960s and 1970s. Forget moral restraint, was Malthus wrong? · In the 1970s, numerous empirical studies failed to detect a robust relationship between national population growth rates and per capita income growth (Simon, 1980) - long run effects were in fact positive · This view may have contributed to a major fall in international funding for family planning programs, beginning in the 1990s · However, in the 1990s researches made two discoveries: o Studies show that much of East Asia's economic growth in the late 20th Century was attributable to high levels of savings and investment facilitated by earlier fertility declines o There is in fact a negative association between population growth and economic performance A population's age composition matters for economic growth . The 'demographic dividend' - the increasing proportion of the working age population in a county's age composition after fertility rates declining - causes countries to potentially raise their level of savings and investment . Birdsall and Sinding, 2001, summarised that findings have demonstrated that there is a negative correlation between population growth and economic growth in developing countries -> this relationship emerged in the post-1980 data and its strength has increased with time
Part 2 The post-WWII boom and bust · The global economy grew very rapidly between 1950 and 1973 - this era was characterised by decolonisation, the rapid diffusion of knowledge and technology around the world, booming international trade and high levels of public and private investment · It was also characterised by historically unprecedented population growth, driven in large part by rapid declines in death rates . This all changed in the early 1970s when the collapse of the Bretton Woods system (US Dollar became less valuable) and rising inflation exposed the world economy to the risk of recession (started with the first Arab oil embargo in 1973, other factors include further oil shocks, a series of debt crises in developing economies and the disintegration of the USSR) . This meant that between 1973 and 1990 in particular, global GDP per capita growth slowed considerably Rapid economic growth mitigates the potential negative impact of rapid population growth · 2 observations can be made from these trends: o Firstly, accelerated population growth in the post-war boom years was stimulated largely by the diffusion of medical knowledge, technologies and public health initiatives