growth. Thus, these studies cannot serve as bases for a policy that aims to reducepopulation growth to raise per capita income growth.
3. If population growth doesn’t affect economic growth, what will?
Good governance and well-implemented economic policies raises economic growthwhich is needed to reduce proverty.In 2008, a
Commission on Growth and Development led by Michael Spence
, aNobel Prize winner in Economics, identified five ingredients for sustaining rapid growthand inclusive development.These high growth economies:i) exploited the world economy;ii) kept macroeconomic stability;iii) achieved high rates of savings and investment;iv) let markets allocate resources; andv) had committed, credible and capable governments.Note that the study didn’t mention population management as one of the ingredients of sustaining high economic growth rates.In his book,
he Ultimate Resource
Julian Simon gives evidence for the crucial rolethat good governance and economic policies play in economic growth when hecompares three pairs of countries that have the same culture and history and practicallyhad the same standard before they split after World War II—East and West Germany,North and South Korea, and Taiwan and China. In 1950, both the communist and non-communist countries had practically the same birthrates and the centrally plannedeconomies had less population pressure than their market-directed counterparts asmeasured by population per square kilometer. Yet the economic growth of WestGermany, South Korea, and Taiwan was better than their counterpart centrally plannedeconomies. Due to faster economic growth, personal incomes in Taiwan and SouthKorea were roughly double China and North Korea, respectively while those in WestGermany’s was more than 10% larger than East Germany in the early 1980s.
Table 1. Population density, 1950 and real income per capita,1950, 1980, and 1982 for selected countries*
East GermanyWest GermanyPopulation density, 1950** 171 201Real gnp per capita, 1950***2,9432,943Real gnp per capita, 19829,914 11,032North KoreaSouth KoreaPopulation density, 1950 76 212Real gnp per capita, 1950 193 193Real gnp per capita, 1982 8171,611ChinaTaiwan