Population Issues

We are living at a time in history when the growth rate of the world's population has just peaked. Two hundred years ago, there were ap-proximately one billion people on earth. The second billion was added during the next 130 years, the third in 35 years, the fourth in 15 years, and the fifth in just 10 years. Most of this growth has occurred in developing countries where death rates have been falling without commensurate declines in birth rates. Currently these countries are growing at 2.0 percent per year (2.7 percent excluding China), compared with 0.6 percent per year in the member countries of the Organization for Economic Cooperation and Development (OECD). Within each of these two groups there are substantial variations: the population of many African countries is growing at more than 3 percent per year, while populations in Sri Lanka, China, South Korea, and the south Indian states are growing at less than 1 percent per year. Among the OECD countries, the United States' population is growing at about 1 percent, while populations in parts of European countries are experiencing zero or slightly negative growth.

There are signs that birth rates are beginning to adjust downward in the developing countries. Between 1965–1970 and 1980–1985, the total fertility rate (the number of children women are expected to have over their reproductive years) declined by 30 percent, from 6.1 to 4.2 births per woman, nearly half way to a replacement level of 2.1 births. While variation in birth rates in different countries is substantial, nearly all countries have now experienced some decline in these rates. There are also signs that mortality rates are declining at a slower rate.

How long these new trends will continue is anyone's guess. Most projections assume total fertility rates in all countries will decline to replacement levels in the next 70 years, after which population growth will cease when the bulge of young in the age structure completes the child-bearing years. If this occurs and mortality trends continue, the earth's population, which now stands at 5.2 billion, will double in the next 30 years and reach 12 billion by 2100 (see figure, p.12).

Of course, great confidence cannot be placed in these projections. Fertility rates could cease declining long before replacement. In Bangladesh, for example, they have declined from a peak of 7.0 to 4.9 children per woman; but it is difficult to imagine what could change during the next 30 years (when the World Bank assumes that replacement will be reached) to make couples content to have no more than two children, especially if one of them is not a boy. This decline has occurred in large part because of Bangladesh's massive family planning program, which has raised the contraceptive use rate from 3 to 35 percent since 1970. But even if it were to reach 50 percent—the rate achieved in the Matlab District, where extraordinary efforts have been made—the total fertility rate would still be above 3 percent. And death rates could decline more or less rapidly, depending on hard-to-predict changes in and the spread of medical technology, as well as the spread of new diseases like AIDS. Indeed, according to some analysts, AIDS could even result in a negative growth rate in some countries.

The overarching policy question for governments is whether public funds should be used to influence these trends. Nearly everyone believes the answer is yes in regard to mortality. Most also believe that it is appropriate to use public funds to help poor families achieve their fertility goals—at a minimum, to help them avoid unwanted childbearing in safe, inexpensive ways, if for no other reason than to reduce the number of septic abortions (believed to be 25 percent of all maternity-related deaths in developing countries). In addition, most would agree that public funds should be used to help alleviate poverty and improve the distribution of income—in the short run because per-capita income of poor families is raised and in the long run because returns to labor relative to returns to capital should improve.

A few years ago most policymakers concerned with the prospects for development in the face of rapid population growth would have answered the questions about the need for government intervention in the affirmative with little hesitation—in part because there was little or no evidence that fertility rates would decline in many developing countries without government intervention. But such affirmation was also the result of acceptance of a set of propositions about the economic, resource, and environmental consequences of population growth, especially in poor countries. In one form or another, these views boil down to the assertion that diminishing returns will eventually set in as population growth continues because each person will have less and less of more or less fixed factors of production.

In a 1958 study, Population Growth and Economic Development in Low-Income Countries, two prominant analysts, Ansley Coale and Edgar Hoover, focused on capital, claiming that over time it would grow less rapidly than the labor force because the savings rate would not increase with an increase in the population growth rate. Indeed, they argued that because rapid population growth increases the proportion of youth in the population, savings—and hence investment as a fraction of total output—would decline (since youths must be supported before they enter the labor force); they also argued that an increasing proportion of investment would have to be devoted to less productive capital such as education, health, and infrastructure.

Others—including the authors of the 1972 study Limits to Growth and of a 1980 report by the U.S. Council on Environmental Quality—have focused on inputs of land, natural resources, energy, and environmental carrying capacity, arguing that these inputs are ultimately fixed in supply because of the finiteness of the earth. In addition, they have argued that phenomena such as deforestation, widespread malnutrition and periodic famines, species loss, and global warming are signs that these limits are close at hand. The possibilities inherent in technological improvements, in substitution of more for less abundant resources and of capital generated by people for natural resources, and in regulations to restrict environmental pressures were assumed, without much investigation, to be insufficient to seriously affect such conclusions.

Out of this intellectual ferment a new view began to emerge, the first major statement of which can be found in a 1986 report, Population Growth and Economic Development: Policy Questions, by the National Research Council. This report, plus subsequent elaborations by others, concluded that population growth can lead to increasing as well as diminishing returns, depending to a large extent on how effectively a variety of adjustment mechanisms operate—mechanisms such as capital, labor, and raw materials markets. Where these mechanisms operate well, as they generally have in developed countries, they will induce substitutions in consumption and production plus technological and institutional innovations that can significantly reduce the potential negative impacts of population growth and might even result in a net positive effect. In this view, because the various adjustment mechanisms operate less effectively in developing countries, it is generally concluded that the net impact of rapid population growth in most (but not all) of these countries is probably negative, but not so negative as to cause alarm.

Not surprisingly, this view has lent support to those who would play down the importance of population control programs. It has also led some to argue that the focus of attention should be on institutional development in order to improve the operation of the various adjustment mechanisms, rather than on population control. Some have even argued that rapid population growth itself is a result of underdeveloped social institutions—for example, the absence of social mechanisms for providing physical, economic, and old-age security, which forces parents to rely more on their offspring. In many ways these revisionist writings are more sophisticated than those of the neo-Malthusians. They systematically incorporate feedback mechanisms, provide a better explanation of past history, try wherever possible to use proper statistical methods, and reach conclusions cautiously—pointing out, for example, differences among countries and calling attention to biases resulting from the omission of some variables. Nevertheless, the revisionists' conclusions, like those of their predecessors, leave much to be desired.

First, most of their statistical studies—such as those purporting to show that the Coale-Hoover effects are small and that the elasticities of substitution are large—use data from developed countries or from cross-section studies that inappropriately lump together countries at different stages of development. Even if these findings are some day confirmed by better data, it must be remembered that the policy concern is with the future, not the past. Hence, even refined statistical studies are not going to resolve the differences of opinion between these two points of view.

Second, while the revisionists include a variety of different feedback mechanisms, one they leave out is the impact of population growth on the adjustment mechanisms themselves. Population growth and the pressures caused by past population growth sometimes make it more difficult for institutions to find solutions and to adopt and implement appropriate policies. The larger the group restricted from using a common property resource like grazing land, the more difficult it will be to privatize the resource—a commonly proposed solution to overexploitation. The larger the population living in poverty, the more difficult it will be to achieve a "global bargain" to substitute cleaner but more expensive fuels for wood and coal. While population pressure increases the need to search for technological innovations, it could result in less trained manpower and fewer resources being free to engage in this search. In short, it is possible for society to have an overload of problems needing solutions, in which case more population growth could lead to less innovation rather than more.

Third, the revisionists ignore the impacts of population and economic growth on the physical environment—the underlying life-support systems—in which they are embedded. While it was a useful simplification to ignore such impacts a century ago, it is no longer useful to do so today and will become even less so in the future.

A more cautionary approach