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Economic Development

Economic development is defined as improving the standard of living of the people in the economy. This is done in many ways like:

  • The consumption level of food is increased
  • Health facilities
  • Education infrastructure
  • Various social, economic, political institutions
  • Variety of products as well as services, etc.

Thus, development in the economy is aimed to raise the opportunities which are enjoyed by the people in the economy.

Population Growth

The growth in population can be understood as a rise in the number of people within a specific area at a particular period. The population of an economy increases when people born in a particular country and immigrate from the rest of the world.

Theories of Population Growth:

Popular Malthus Theory

There are two main assumptions which lie behind this theory. The first assumption is that food is a necessity for people. The second assumption is that multiplication would remain in nearly the same state.

Malthus theory is very popular which points out that as population increases in a geometric model, the food supply increases just in an arithmetic mode. Todaro et. al (2009) also has the same viewpoint and shows that while the population is growing at geometric mode, it can be brought down with a decline in the food supply.

According to him, due to diminishing returns, the agricultural land is affected over time. He also says that with a rise in population, the competition for land use is increasing. This is further resulting in the opportunity cost of either food production on the land or use of land for other uses such as hospitals, housing, etc.

Demographic Transition Theory

Demographic transition shows the historical move from both high birth rates and high death rates in economies with the level of technology and economic development, to the low level of birth rates and death rates in economies with advanced technology and high level of economic development. There are five transition stages and the shift in stages take place in many industrialised countries.

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The aspect of Population Dynamics in Economic Development

There is a substantial effect of growth in population on economic development. There are several viewpoints about the influence of growth in population on the nation.

Some researchers believe that:

  • growth in population hurts the economic growth
  • While others believe that it has a positive effect.

Thus, there is always debate on the topic of the relationship between population dynamics and economic development.

Developed and Developing Nations

It is observed that the influence of growth in population on economic development varies for different countries. It is seen that developed countries are benefited from the growth in population. They witness an increase in their Gross National Product with an increase in population. Whereas, the case is reverse for developing countries. The developing economies face a low level of Gross National Product with growth in population.

It has been advised that the less developed nations should adopt policies to control population that is high birth rates and low death rates, thereof the cost of population explosion. Many economies have taken steps to control the population by adopting policies which can categorise into two broad titles:

  • Population- Responsive policies
  • Population- Influencing policies.

Some of them are:

  • Both the formal and informal sector were given audio and visual media education on the necessity to have smaller households.
  • Many economies encouraged the initiation of the family- planning programs in health centres.
  • Sex education was provided so that there can be control in the unwanted pregnancies. This can help to control high birth rates.
  • Even the government can provide incentives to control the population. The government can subsidise smaller families or can reduce the income tax of the families with a limited number of members.
  • The social and economic status of women can be raised to create favourable conditions that support delayed marriage and reduced fertility.

However, Kuznets highlighted a positive correlation between growth in population and economic growth. According to him, population growth is only one variable that affects economic growth. There are various other factors also, such as per capita income, technology, etc. which have an impact on economic development.

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