Population growth and economic and social development

This article sets forth 3 positions on population growth: 1) rapid population growth is a central development problem that implies lower living standards for the poor; 2) proposals for reducing population growth raise difficult questions about the proper domain of public policy, yet it is acceptable for governments to attempt to influence private decisions about family size; and 3) the experience in many developing countries shows that quick, effective measures can be taken to reduce fertility. Rapid population growth has slowed development because it exacerbates the difficult choice between higher consumption in the present and the investment needed to bring higher consumption in the future. As populations grow, larger investments are needed just to maintain current capital/person. It further threatens the balance between natural resources and people and creates severe economic and social problems in urban areas. Public policy must provide alternative ways for poor families to secure the benefits provided by large family size. That is, governments need to provide tangible evidence that it really is in the best interests of parents to have fewer children. Also required is greater infomation about and access to fertility control. When family planning services have been widespread and affordable, fertility has decline faster than social and economic progress alone would predict. There is a need for immediate action to improve women's status and to make education, family planning, and primary health care more available. Although economic and social progress help to slow population growth, rapid population growth hinders development. Thus, governments must act simultaneously on both fronts. Accumulating evidence on population growth in developing countries shows that is the combination of social development and family planning that reduces fertility.     

Population growth and economic growth: a reconsideration

The relationship between population growth and development has long been a controversial topic in the economic development literature. Early work by Hoover and Coale and more recent work by Blanchet suggest that high fertility suppresses per capita income growth. However, recent work by Kelley and Srinivasan are ambivalent about such a neo-Malthusian relationship between population growth and economic growth. The authors examine these conflicting positions. They emphasize that the rates of both population growth and income growth are endogenous variables within a general equilibrium framework. An endogenous growth model with endogenous fertility is then developed. It is found that when all exogenous variables are controlled for, there exists an inverse relation between population growth and economic growth. However, when some exogenous factors change, such as an improvement in technological progress, the relation becomes ambiguous. This suggests that the conflicting findings in the literature may be because of the presence of substantial heterogeneity in unobserved variables across countries and over time in cross-country panel data sets.     

Population growth and economic growth

This discussion of the issues relating to the problem posed by population explosion in the developing countries and economic growth in the contemporary world covers the following: predictions of economic and social trends; the Malthusian theory of population; the classical or stationary theory of population; the medical triage model; ecological disaster; the Global 2000 study; the limits to growth; critiques of the Limits to Growth model; nonrenewable resources; food and agriculture; population explosion and stabilization; space and ocean colonization; and the limits perspective. The Limits to Growth model, a general equilibrium anti-growth model, is the gloomiest economic model ever constructed. None of the doomsday models, the Malthusian theory, the classical stationary state, the neo-Malthusian medical triage model, the Global 2000 study, are so far reaching in their consequences. The course of events that followed the publication of the "Limits to Growth" in 1972 in the form of 2 oil shocks, food shock, pollution shock, and price shock seemed to bear out formally the gloomy predictions of the thesis with a remarkable speed. The 12 years of economic experience and the knowledge of resource trends postulate that even if the economic pressures visualized by the model are at work they are neither far reaching nor so drastic. Appropriate action can solve them. There are several limitations to the Limits to Growth model. The central theme of the model, which is overshoot and collapse, is unlikely to be the course of events. The model is too aggregative to be realistic. It exaggerates the ecological disaster arising out of the exponential growth of population and industry. The gross underestimation of renewable resources is a basic flaw of the model. The most critical weakness of the model is its gross underestimation of the historical trend of technological progress and the technological possiblities within industry and agriculture. The model does correctly emphasize the exponential growth of population as the source of several complications for economic growth and human welfare. Stabilization of population by reducing fertility is conducive for improving the quality of population and also advances the longterm management of the population growth and work force utilization. The perspective of longterm economic management involves populatio n planning, control of environmental pollution, conservation of scarce resources, exploration of resources, realization of technological possibilities in agriculture and industry and in farm and factory, and achievement of economic growth and its equitable distribution.     

Population and development: controversy and reconciliation

This paper evaluates the 2 most important antinatalist arguments the have dominated the population debate over the last 25 years, drawing heavily on 3 1984 studies -- land and resource scarcity and saving and investment. The extent to which these arguments have successfully included the indirect effects of population growth on an economy in order to determine the net impact of population is assessed an emerging revisionist interpretation of the role of population in development is discussed. It is believed that on scientific grounds, and focusing primarily on economic impact, neither the arguments nor the various models used to support the antinatalist position sufficiently support the strength of the general conclusion that population growth exerts a strong adverse impact on the economy. Population growth reveals sooner the symptoms of underlying problems, but many of the solutions are to be found in areas other than altering the rate of population growth. Population growth is viewed less as a cause of development problems and more as an agent that pushes more fundamental problems to the forefront. Empirical evidence concerning nonrenewable resource constraints is not sufficient to make any strong conclusion about the impact of rapid population growth. With regard to food, the problem is more one of unrealized potential for increasing agricultural output and of the distribution of income than of diminishing returns to land. The results of economic research have failed to provide substantial and convincing empirical evidence to support the strong antinatalist concern about the adverse effect rapid population growth has on savings and investment. Authors of recent literature reviews deemphasized this impact. A revisionist interpretation deemphasizes some of the traditional" hypothesized direct influence of population and assigns population the role of an accomplice in contrast to the leading role of villain in the development story. To this list is added the importance of the pace of population growth and the political response to it. 2 problems commonly attributed to population are noted to illustrate some of the relevant considerations: food imbalance and high unemployment rates. For many countries, a main cause of food shortage is government policy that penalizes agriculture through the imposition of taxes and subsidies that twist the terms of trade against farmers, thereby reducing incentives to produce and innovate. 1 impact of rapid population growth is to bring this problem to a head sooner. It also forces a more rapid response. The critical question is whether such "time pressure" is more or less likely to bring about changes that will address the causes of the problem or the manifestations of problems. For high rates of unemployment or underemployed labor in 3rd world cities, the question is whether the pressure of time results in a resolution of the fundamental causes or just a treatment of the symptoms.     

Population and development problems: a critical assessment of conventional wisdom. The case of Zimbabwe

Conventional wisdom, as reflected in reports by the World Bank and the Whitsun Foundation, maintains that control of population growth is the key strategy for stimulating socioeconomic development and ending widespread poverty. The Witsun Foundation has criticized the Government of Zimbabwe for failing to include specific policies for population control in its National Transitional Development Plan. the report further expressed alarm about future availability of land to contain Zimbabwe's growing population. Communal areas are designed for a maximum of 325,000 families yet presently contain 700-800,000 families. This Malthusian, deterministic emphasis on population growth as the source of social ills ignores the broader, complex set of socioeconomic, historical, and political factors that determine material life. Any analysis of population that fails to consider the class structure of society, the type of division of labor, and forms of property and production can produce only meaningless abstractions. For example, consideration of crowding in communal areas must include consideration of inequitable patterns of land ownership in sub-Saharan Africa. Unemployment must be viewed within the context of a capitalist economic structure that relies on an industrial reserve army of labor to ensure acceptance of low wages and labor-intensive conditions. While it is accepted that population growth is creating specific and real problems in Zimbabwe and other African countries, these problems could be ameliorated by land reform and restructuring of the export-oriented colonial economies. Similarly, birth control should not be promoted as the solution to social problems, yet family planning services should be available to raise the status of women. Literacy, agrarian reform, agricultural modernization, and industrialization campaigns free from the dominance of Western capitalism represent the true solutions to Zimbabwe's problems.     

Remittances flow and financial development in Bangladesh

Workers' remittance is a major source of foreign exchange earnings and plays an important role in the economy of Bangladesh. It accounts for 12% of GDP in 2010. This paper examines with annual data for 1971–2008, whether the flow of remittances is contributing positively to the development of the financial system of the country. Our results suggest that remittances have a significant positive effect on financial development. However, financial sector's development is neutral in its effect on the inflow of remittances.     

Population and economic growth: Ancient and modern

This paper focuses on the evolution of the relationship between population and economic growth from Hume to New Growth Theory. In this paper, we show that there were two main views on the subject. There were those who assumed that the relationship between fertility rate and income was positive. On the other hand, there were those who raised the possibility that this linkage did not occur, and they emphasised that an increase in income did not necessarily lead to having more children. Following from Hicks’ methodological precept, the paper will show that their position on the issue was related to a socio-economic fact: the sibship size effect. We show that those who took the view that an increase in income leads to the desire to have more children did not take into consideration the sibship size effect, while those maintaining that there existed a negative relationship introduced into their utility function a sibship size effect.     

Population heterogeneity and growth

I investigate the robustness of the link between growth and heterogeneity in a population along ethnic, linguistic, religious, and socio-economic class lines using cross-country data covering the period 1960–92 and 72 countries. In addition to 21 distinct explanatory variables extensively used in the empirical growth literature, I consider several fragmentation and polarization indices capturing the heterogeneity in a population to deal with measurement uncertainty, and utilize Bayesian Model Averaging techniques to address uncertainty issues regarding model specification. My results indicate that while substantial data evidence favors the inclusion of population heterogeneity as a theory when proxied by fragmentation indices, it does not support the inclusion of this theory when proxied by polarization indices. Furthermore, the religious fragmentation index has the strongest evidence in favor of its inclusion as opposed to ethnic and linguistic fragmentation indices and income inequality.     

Population growth and the pattern of trade: A Neo-Ricardian approach

If the young and old provide economically distinct factors of production then the rate of growth of the population determines the factor endowment ratios and therefore both the composition of output and the pattern of foreign trade.     

Determinants of Capital Flight: An econometric case study of Bangladesh

While Bangladesh remains steeped in staggering external debt, it is also concurrently witnessing a substantial outflow of domestic capital. This situation raises serious policy concerns for its development prospects. This paper applies the Bounds testing and the Autoregressive Distributed Lag procedures to confirm the existence of a long-run equilibrium relationship between capital flight and its determinants, and to estimate the long-run and short-run behavior of capital flight from Bangladesh. The estimated results suggest that political instability is the single most significant cause of capital flight from Bangladesh, while increases in corporate income taxes, higher real interest rate differentials between the capital-haven countries and Bangladesh, and lower GDP growth rates also significantly contribute to capital flight.     

The causal interaction between financial development and human development in Bangladesh

This note investigates the causal relationship between financial development measured as the domestic credit to private sector (% of GDP) and human development measured by the Barro–Lee index in Bangladesh. The bootstrap causality tests with leverage adjustments are implemented in order to avoid any distributional assumption. It is found that human development is causing financial development. However, there is no significant causality running from financial development on human development. The policy implication of these empirical findings is also elaborated.     

Financial development and economic growth in an oil-rich economy: The case of Saudi Arabia

We investigate the effect of financial development on economic growth in the context of Saudi Arabia, an oil-rich economy. In doing so, we distinguish between the effects of financial development on the oil and non-oil sectors of the economy. Using the Autoregressive Distributed Lag (ARDL) Bounds test technique, we find that financial development has a positive impact on the growth of the non-oil sector. In contrast, its impact on the oil-sector growth and total GDP growth is either negative or insignificant. This suggests that the relationship between financial development and growth may be fundamentally different in resource-dominated economies.     

Population growth: A pure welfarist approach

In this study we propose a framework based on welfarist principles to deal with several issues concerned with population economics models, such as the Repugnant Conclusion, both in absolute and relative sense, the shape of childbearing costs and population dynamics, under both normative and positive perspectives. We show that the relative critical level criterion can avoid both the assumption of high childbearing costs and the absolute repugnant conclusion (ARC) but cannot avoid the relative repugnant conclusion (RRC). Moreover, optimal fertility is increased by technological shocks and displays cycles. Both ARC and RRC can be avoided by extending the model to a decentralized economy with consumption externalities; in the latter model, a technological shock reduces long‐run fertility and can generate cycles along the transitional path.     

Financial deregulation and productivity growth in banking sector: empirical evidence from Bangladesh

This article examines the effects of regulatory reform on productivity growth in the Bangladesh banking industry. We use a unique balanced panel dataset comprising bank-level annual data from the early deregulation year (1984) to the most recent available period (2012) from major commercial banks in Bangladesh. Applying the Färe-Primont index, the paper provides estimates of productivity growth and identifies sources of total factor productivity (TFP) change. Empirical results show the sample banks have experienced positive TFP change after the financial deregulation. On average, TFP growth is higher in private banks than their public sector counterparts in the post-reform period. In addition, the decomposition analysis shows technological progress is the main driver of productivity change. Similar results are obtained by using the stochastic frontier analysis (SFA). Thus, empirical results remain robust irrespective of the methodology used. The regression analysis finds a positive technical change in the first stage of the reform program, i.e. during the transition period, as leading banks employ advanced technology to compete with potential new entrants. The result also shows that the banking industry still remains concentrated within the state-owned banks.     

Population and economic growth: a simultaneous equation perspective

This article examines the relationship between Population Growth (PG) and Economic Growth (EG) in the framework of simultaneous structural equation models. Based on Lewbel (2012), the structural parameters can be estimated using the Generalized Method of Moments (GMM). Identification requires a heteroscedastic covariance restriction that appears in some models of endogeneity, measurement errors and panel data. This study obtains several findings. First, the current and lagged variables of PG negatively and positively affect EG in the short run. Second, PG does not significantly influence EG in the long run. Third, the reverse relations running from EG to PG are weak in both the short and long run, regardless of economic development conditions.     

Population growth: a comparison of evolutionary views

"Economists are divided about population growth: the pessimism of neo-Malthusians contrasts strongly with the optimism of cornucopians. Despite their differences, however, both schools of thought reject economic orthodoxy and prefer evolutionary forms of theory. Their interpretations of evolution are different: the neo-Malthusians appeal to the entropy law, whereas the cornucopians emphasize human creativity expressed through markets. [The author argues] that both schools are right to adopt an evolutionary outlook, but that they are too restrictive in their conception of evolution. A more complete evolutionary view, which allows properly for social institutions, could give a more balanced account of population growth."     

Financial development and poverty reduction nexus: A cointegration and causality analysis in Bangladesh

This paper contributes to the literature by investigating the relationship between financial development, economic growth and poverty reduction in Bangladesh using quarter frequency data over the period of 1975–2011. This issue is of importance for developing economics given the role of financial sector in mobilizing and allocating savings into productive investments. We use an innovative empirical approach based on ARDL cointegration with structural breaks. Our findings show that a long-run relationship between financial development, economic growth and poverty reduction exists in Bangladesh. Financial development helps to reduce poverty, but its effect is not linear.