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Population and Development in Poor Countries

Population and Development in Poor Countries: Selected Essays

Copyright Date: 1992
Pages: 484
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  • Book Info
    Population and Development in Poor Countries
    Book Description:

    Making the case that population growth does not hinder economic progress and that it eventually raises standards of living, Julian Simon became one of the most controversial figures in economics during the past decade. This book gathers a set of articles--theoretical, empirical, and policy analyses--written over the past twenty years, which examine the effects of population increase on various aspects of economic development in less-developed economies. The studies show that within a century, or even a quarter of a century, the positive benefits of additional people counterbalance the short-run costs. The process is as follows: increased numbers of consumers, and the resultant increase of total income, expand the demand for raw materials and finished products. The resulting actual and expected shortages force up prices of the natural resources. The increased prices trigger the search for new ways to satisfy the demand, and sooner or later new sources and innovative substitutes are found. These new discoveries lead to cheaper natural resources than existed before this process began, leaving humanity better off than if the shortages had not appeared.

    Originally published in 1992.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-6217-7
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Acknowledgments
    (pp. ix-x)
  4. Introduction
    (pp. xi-xx)

    This book studies the effects of population increase on various aspects of economic development in less-developed economies. It pulls together a set of articles—theoretical and empirical studies, and policy assessments—written between about 1973 and 1990, with prefaces to help bring out their meanings.

    The central issue addressed in this book, as in my previous books on population economics, is the effects of the number of people upon the standard of living, with special attention to raw materials such as food and metals. The most important effects are those that occur in the intermediate and long run, rather than...


    • 1 The Effects of Population on Nutrition and Economic Well-Being
      (pp. 3-23)

      Why has there not been increased famine and poorer nourishment on average as the world’s population has increased? Malthusian theory, with its elements of fixed land and diminishing returns to additional labor, provides no explanation. One escape route from the Malthusian trap is an increase in the supposedly fixed supply of land, and this has been the most important avenue of total food increase throughout history. But without an accompanying change in technology (including transportation), increases in the land supply must surely lead eventually to a lower standard of welfare, due both to the additional time and effort necessary to...

    • 2 Demographic Causes and Consequences of the Industrial Revolution
      (pp. 24-40)

      Increased European population density, and the industrial revolution, are the fundamental causes of each other.

      On one side of the relationship, the industrial revolution emerged out of increased technical knowledge and improved social organization. Knowledge is the product of human minds, and more minds create more knowledge, other things equal. The larger number of Europeans who were alive in, say, 1850 than 1450 or 1050 produced knowledge more rapidly than if the number of persons had not grown in the previous centuries. Furthermore, the types of social organization that may be found among a relatively small political community, living at...


    • 3 An Integration of the Invention-Pull and Population-Push Theories of Economic-Demographic History
      (pp. 43-77)

      Probably before, and certainly since Malthus, the established theory of the growth of human populations has been that which Baumol labeled “the magnificent dynamics.” The associated hypothesis about demographic-economic history, which will be called “invention-pull” in this chapter, suggests that from time to time, independently of population growth, inventions appear which increase productive capacity and provide subsistence to more people. According to the Malthusian hypothesis, population then increases to use this new capacity until all the productive potential has been exhausted, and thus, the history of population growth is only the reflection of the history of autonomous inventions.

      In 1965,...

    • 4 Some Theory of Population Growth’s Effect on Technical Change in an Industrial Context
      (pp. 78-88)

      The question at hand is the role of population changes in the adoption of new innovations. The common view seems to be that a shortage of workers leads to the adoption of new technology by way of an increase in the price of labor, with consequent substitution of capital (embodying new technology) in place of workers. The other side of the same coin is that an increase or plenitude of workers is said to retard the adoption of new devices by making it more profitable to use additional workers than to buy new capital. Eventually we would like to answer...

    • 5 Population, Natural Resources, and the Long-Run Standard of Living
      (pp. 89-121)

      Situated at a randomly chosen date in the past, a forecaster of the price of a randomly chosen raw material, for a randomly chosen future date (say, one or ten or one hundred years later) has had a remarkably good chance of being correct by predicting that the future price would be lower than the price as of the forecast date.¹

      So predictable a relationship calls for an explanation of its mechanism, rather than regarding it simply as an empirical regularity. Clearly it is not satisfactory to consider the phenomenon to be chance outcomes of a Malthusian “race” between, on...

    • 6 Robinson Crusoe Was Not Mainly a Resource Allocator
      (pp. 122-126)

      In a recent presidential address to the Association of Environmental and Resource Economists, Geoffrey M. Heal defined the field in standard Robbins fashion:

      It is obvious that our thinking about these issues in the last decade or so has represented a pioneering effort within economics, largely because economists found themselves very short of appropriate models when these concerns emerged. Butif economics really is the study of the allocation of scarce resources amongst competing uses,this paucity is difficult to explain. (1982, 1, italics added)

      This definition of economics certainly encompasses many important resource problems. But it also excludes (or...

    • 7 There Is No Low-Level Fertility-and-Development Trap
      (pp. 127-142)

      The low-level population trap is a staple of development theory. The modern form as sketched below is due to Nelson and Leibenstein.¹ But the idea is really straightforwardly Malthusian: If food consumption per head rises above subsistence for exogenous reasons, fertility will then rise and increase the number of mouths until it again falls to the level of subsistence. Hence, the economy is “trapped” at the equilibrium level of subsistence. Mortality also figures in the Malthusian scenario. But during the twentieth century, a very large part of the observed drop in death rates in less-developed countries seems to have occurred...

    • 8 Population Growth May Be Good for LDCs in the Long Run: A Richer Simulation Model
      (pp. 143-176)

      There is a fundamental contradiction in economic knowledge concerning the effect of population growth in less-developed countries (LDCs). On the one hand, the main theoretical elements suggest that more population retards the growth of output per worker.¹ The overwhelmingly important element in the theory is MaIthusian diminishing returns to labor, as the stock of capital (including land) does not increase in the same proportion as does labor. Another important theoretical element is the dependency effect, which suggests that saving is more difficult for households when there are more children and that higher fertility causes social investment funds to be diverted...


    • 9a The Relationship between Population and Economic Growth in LDCs
      (pp. 180-198)

      Does a larger number of people in a country imply poorer or better economic performance? That is the general question this study addresses. It is the same question that has itched such students of population as Aristotle, Plato, William Petty, and Thomas Malthus.

      The answer we offer is that more people mean better economic performance. The benefit arises from greater population density. Total population size and the rate of population growth have little independent effect on economic growth, we find.

      How to evaluate the effect of population on a country’s economy is far from obvious. A key issue is the...

    • 9b On Aggregate Empirical Studies Relating Population Variables with Economic Development
      (pp. 199-208)

      The empirical studies of the relationship across samples of nations between the rate of population growth or density or fertility, and the rate of per-person economic growth, are often said to be not meaningful or relevant. For example, Robert Repetto (1985a) dismissed this body of evidence as follows:

      It does not matter how many times the exercise is repeated, or whether it has been done by Nobel Prize winners. Nobody has ever won a prize for such analysis, nor ever will. It is fallacious. Every graduate of a basic course in economics or other social science knows as much. Yet,...

    • 10 The Positive Effect of Population Growth on Agricultural Saving in Irrigation Systems
      (pp. 209-222)

      This essay demonstrates in a cross-national sample of less-developed countries (LDCs) that population growth has a large positive effect on agricultural saving in irrigation systems. And presumably the positive effect of population growth on all saving is considerably greater than the irrigation-system effect alone. This effect may be of the same general magnitude, but in the opposing direction, as the observed negative effect of population growth on monetized capital formation in LDCs.

      Models of population and economic growth (e.g., Coale and Hoover 1958) commonly assume that,ceteris paribus, higher fertility means lower aggregate saving. The available data seem to support...

    • 11 “Population Pressure” on the Land: Analysis of Trends Past and Future
      (pp. 223-241)

      At the heart of the Malthusian trap is increased “population pressure” on agricultural land. The scenario portrays increasing numbers of agriculturists working on a fixed supply of land so that there is less and less land per farmer.

      The quantity of arable land clearly is not fixed. But land expansion cannot prevent such a trend of increasing population pressure in a very long run of increasing population growth. Nor does technological progress that reduces theproportionof the population in agriculture imply an escape from the trap; theproportionof the agricultural labor force (ALF) to the total labor force...

    • 12 The Effect of Population Density on Infrastructure: The Case of Road Building
      (pp. 242-258)

      The ill effects of population density are well known: less farmland per farmer and consumer, and more congestion. The positive effects of population density have been discussed less and studied almost not at all. This chapter takes up one of the ways in which increased population density can be of economic benefit: higher density causes more available infrastructure per worker. More specifically, this chapter studies the effect of differences in population density on the amount of road construction. The effect of per-capita income on road construction is also discussed, but primarily it enters the study as a factor that must...

    • 13a The Effect of Population Growth on the Quantity of Education Children Receive
      (pp. 259-283)

      One of the more sophisticated arguments against population growth is that it reduces the amount of education that children receive. Kuznets (1973) goes so far as to consider this the most important drawback of population growth in less-developed countries (LDCs). He shows that the effect of additional persons on the stock ofphysicalcapital would not be hard to overcome by a reduction in consumption in order to increase the amount of investment. But one must also consider the additional investment inhumancapital through education that is required for additional people if the level of education is not to...

    • 13b The Effect of Population Growth on the Quantity of Education Children Receive: A Reply
      (pp. 284-288)

      When Professor Meeks raised his central point in correspondence, the original authors agreed that in principle his choice of variable is statistically sensible. But we are surprised that Meeks’s alteration, working with data that are as crude as these are, made even a discernible difference in his results. And the shift in variable has the most statistically clear-cut effect in the MDC case, where the data are surely better, which strengthens Meeks’s argument for his specification being more appropriate.

      Meeks’s reanalysis of the original data for LDCs led us into some further explorations, however. The overall story turns out to...

    • 14 Does Population Growth Cause Unemployment, or Economic Development, or Both?
      (pp. 289-316)

      After World War II, it became commonplace that population growth exacerbates unemployment. Meade may serve as an example: “Population pressure leads to . . . heavy unemployment” (1967, 233). And Thorbecke: “Perhaps the first and foremost contributing factor [to unemployment] . . . is the continuing acceleration in the growth rates of population and labor force” (1970, 17). The best-known simulation models of population and economic development embodied a direct unemployment-population growth relationship (e.g., Enke 1971). And the International Labor Office institutionalized the proposition in a research program (ILO 1970, 1971). This viewpoint continued into the 1980s; the World Bank’s...

    • 15 The Effects of Population Size, Growth, and Concentration on Scientific Productivity
      (pp. 317-333)

      The central place of knowledge and the technological level in the economic process is now unchallenged. As Kuznets put it, “The greatest factor in growth of output per capita is, of course, the increasing stock of tested, useful knowledge” (1960, 328).

      And, according to Kuznets, the amount of knowledge produced depends on the size of the population. Comparing a larger to a smaller population, or a faster-growing to a slower-growing population: If the bigger population educates and equips its people as well, or almost as well, as the smaller population, then the larger population implies more producers of knowledge. As...

    • 16 Population Size, Knowledge Stock, and Other Determinants of Agricultural Publication and Patenting: England, 1541–1850
      (pp. 334-360)

      Population size has been shown to affect theadoptionchoice among known agricultural techniques (Boserup 1965). Population size should also affect theinventionof new agricultural techniques. This paper offers a model of invention and innovation in agriculture with a focus on population size, applies it to the numbers of didactic books published on farming techniques and to the number of agricultural patents issued in England between 1541 and 1850, and presents estimates of a reduced-form equation derived from the model. The period was selected to be long enough to include large swings in total population size, and the place...


    • 17 Population Growth, Economic Growth, and Foreign Aid
      (pp. 363-388)

      It is a great honor, as well as a great pleasure, for me to contribute to this Festschrift honoring Peter Bauer and his pathbreaking work on economic development. My acquaintance with Bauer’s point of view goes back to about 1970 when I first taught a graduate course in development economics. At that time I fortunately discoveredThe Economics of Underdeveloped Countries, coauthored by Bauer and Basil Yamey (1957). Its analyses and case studies gave me confidence to say to the class what my survey of the literature had already suggested, namely, that development economics is not different than any other...

    • 18 The Welfare Effect of an Additional Child Cannot Be Stated Simply and Unequivocally
      (pp. 389-410)

      Analyses of the welfare economics of population growth generally make one or more of the following assumptions: (1) The criterion of social welfare at a given time is per-capita (or per-consumer) income (e.g., Enke 1966). (2) The effect of a given individual on society is limited to his own impact during his own lifetime (e.g., Mirrlees 1972). (3) Welfare is assessed at a given moment, or at the same rate along a growth path, or without distinguishing between the various periods of the additional child's life cycle (e.g., Phelps 1968). Most of the older literature makes all of these assumptions...

    • 19 On the Evaluation of Progress and Technological Advance, Past and Future
      (pp. 411-422)

      The more important the question, it often seems, the harder to express it in a manner that can be discussed sensibly. So it is with the question about whether progress can and will continue indefinitely. And as with other apparently important questions, it may turn out to be evanescent.

      Perhaps because of the imprecision of this question, attention has focused recently on a related inquiry: Will scientific and technical knowledge continue to increase at the pace of recent times? And, will there be “breakthroughs” in the future as there have been in the past? Knowledge—which hereafter will mean only...

    • 20 Lebensraum: An Essay on Peace in the Future; or, Population Growth May Eventually End Wars
      (pp. 423-434)

      A world in which countries lack material reasons to make war? Even the most starry-eyed optimist does not foresee such a day dawning even in the most distant future. But perhaps if we shake loose from some notions about land and territory that people have held since the beginning of time, notions that only now are beginning not to be appropriate, we may see such a day acoming.

      Adolph Hitler assaulted Europe (and, indirectly, the whole world) with perhaps the worst catastrophe in history except for the Black Death under the banner of a wrong doctrine about the relationship of...

  9. Epilogue: Some History and Reflections on Population Economics
    (pp. 435-454)

    The account that follows concentrates heavily on writers whose ideas were valuable but nevertheless had little or no influence on subsequent thought. This differs from the usual practice of intellectual history, which mainly discusses work that is important in the historical chain of intellectual influence.

    It should be noted, however, that there was almost no accumulated progress in received economic thought about the consequences of population growth between Malthus and the 1960s. This may be seen in the almost complete absence of mention of either theoretical or empirical prior work on the subject in such stocktaking volumes as the two...

  10. Index
    (pp. 455-463)