Economic Growth and Demographic Transition in Third World Nations

A Chaos and Complexity Theory Perspective

Şefika Şule Erçetin, Nilanjan Ray, Saurabh Sen

• Publisher: Apple Academic Press
• Year: 2019
• ISBN:
  9780429783357
• Edition: 1
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

This volume presents a new perspective on demographic transition, economic growth, and national development via exploration of the Third World economies. It provides a multidimensional approach to the close relationship between the concept of the chaos and complexity theory and provides a deliberate glance into the plight of policy formulation for demographic transition, economic growth, and development of Third World countries. The volume discusses the efficiency of good strategies and practices and their impact on business growth and economic growth, depending on the depth and diversity of infrastructure sector in particular and overall socioeconomic development in general.

Economic Growth and Demographic Transition in Third World Nations: A Chaos and Complexity Theory Perspective covers a conglomeration of various aspects and issues related to the effect of demographic transition on socio-economic development in Third World countries, especially in the post-globalized era. It focuses on the applicability of the chaos and complexity theory in order to elicit transformational policies and aims to discuss and predict future projections of the new world of the economic growth policies.

PART 1

Demographic Transition

CHAPTER 1

Relationship Between Demographic Transition and Economic Growth

ŞEFİKA ŞULE ERÇETİN^1,* and SEVDA KUBİLAY²

¹Department of Educational Sciences, Faculty of Education, Division of Educational Administration, Hacettepe University, Ankara, Turkey

²Vocational School of Social Sciences, Ömer Halisdemir University, Nigde, Turkey

*Corresponding author. E-mail: [email protected]

ABSTRACT

The aim of this article is to examine the relationship between demographic transition and economic growth on the basis of the literature review. The demographic transition involves four phases in which fertility and mortaliy rates and life expectancy show differences according to the developmental features of each phase. There are different theories on the relationship between demographic transition and the economic growth. The pessimistic theory which has its root from Thomas Malthus claims that the population growth causes economic deterioration. The optimistic theory opposes the Malthusian approach and asserts that there is a positive relationship between the population and the economic growth. The neutralist theory supports the idea that there is no significant relationship between them. Although this discussion on population and economic growth continues, there is a current challenge for the world which is having ageing populations. The implications give the signal that both developed and developing countries are following this trend and it is a threat hindering to have effective labor force, savings, and investments.

1.1 INTRODUCTION

Economic growth is affected by several factors. Inner growth models address population growth and human capital accumulation. Those models take technological developments and public investments as an internal variable. Theories of external growth argue that capital accumulation is a significant determinant for economic growth and the long-term growth is influenced by technology (Pala and Teker, 2014). As it is seen, population and human capital are important factors to explain economic growth. The change in population growth through history has been interpreted differently by scholars. Since ancient times, the connection between the population and the economy has been the center of attention for politicians, philosophers, and scholars. In the past, populous kingdoms were popular and favorable because the crowd used to mean wellbeing and power. The wars were done to occupy territories and expand the borders so that the population would get larger and the kingdom will be more sound and powerful. Soon enough it was seen that populations were not influenced by policies easily and crowded populations caused lower living conditions (Reher, 2012).

The first theory in relation to population and economy was developed by Thomas Robert Malthus and the theory emphasized that population is the most significant economic variable and it asserted that population growth is determined by the economy. That is to say, they both affect each other reciprocally (Reher, 2012). The change in population growth is explained by the demographic transition theory. The theory gives an idea about the link between population and economy during a period of momentous change. According to the theory, fertility and mortality rates are high and fluctuating at the beginning and then the rates gradually get lower and stable. This change affects the population age distribution as well. However, the demographic transition is not experienced at the same time by all the countries. This period of change was experienced by some countries earlier in the past but some did not have such a change until the 1950s. Together with the demographic transition, the high ratio of children in the population gets lower and the ratio of elderly gets higher. The demographic transition has been affected by the industrial revolution, urbanization, and educational and technological developments (Lee and Reher, 2011). In this chapter, the relationship between population and economic development will be examined within the scope of the demographic transition. Firstly, the demographic transition theory will be explained and then the connection between population and economic growth and theories about them will be discussed.

1.2 DEMOGRAPHIC TRANSITION THEORY

The theory has different definitions and interpretations because scholars and writers stressed different dimensions of the theory. The theory gives an explanation about the change in birth and death rates in developed nations (Potts and Selman, 1979); it puts an emphasis on the predictive feature of the theory; if developing countries follow the developed ones, they will have the same transitions in their populations as well (Demeny, 1972). McNamara (1982) stresses the transformation from a traditional society to an industrialized modern society. All the definitions have a common ground: demographic transition theory focuses on birth and death rates and change in population size. The theory relates these focal spots with socioeconomic conditions. According to the theory, ratio of birth and death is affected by the alteration in socioeconomic conditions (Nielsen, 2016). Mortality rates decrease when the living standards and health conditions get better, this improvement makes fertility rate decreased afterward (Lutz and Sanderson, 2005). The theory includes some stages to explain the relationship mentioned: the preindustrial stage; the postindustrial stage of explosion; the stage of slowing down growth; and the stage of a stable size of population. However, some researchers claim that there are more stages in the frame of the theory (Nielsen, 2016).

Phase 1: In this stage, high birth and mortality rates are common and the state of growth can be described as stagnant. Due to the fact that this stage reflects preindustrial age, living standards are low, health care and hygiene are poor. There is a strong fluctuation in the ratio of birth and death (Warf, 2010). Infant mortality and premature deaths of adults are quite common in this phase so a high birthrate hardly makes up for losses (Rimashevskaia et al., 2013).

Phase 2: This stage is identified with the industrial revolution so it is quite different from the first stage and it is called as the Early Industrial Age. A rapid growth of population is witnessed during this stage, in other words, there is a population explosion. Due to industrialization, life conditions get better, as a result, the death rate declines. Also in this stage, there is a continual high birth rate; there is a change from stagnation to growth (Galor and Weil, 2000). Life expectancy goes up and early mortality rate declines due to improved sanitation and developments in the field of medicine, especially in the cities. A large percentage of the population lives in the countryside but moving to cities is popular due to industrial developments. This phase is the beginning of the transition from the traditional to the modern type of reproduction (Rimashevskaia et al., 2013).

Phase 3: During this phase, a gradual decrease in the population growth occurs. The number of urban families is getting increased and most of the families live in the cities. There is a trend of having fewer children among urbanites, which spreads to the poor population as well (Rimashevskaia et al., 2013). This stage is also called the Mature Industrial Age and is characterized with the slowing growth. During this stage, birth control comes to the fore and women join the business world, educational opportunities increase, and living standards get improved (Nielsen, 2016).

Phase 4: This stage represents the Postindustrial Age; there is a balance between the ratio of birth and death so the population size becomes stable. The influence of infectious diseases is low, instead smoking and obesity become prevalent in this stage (Warf, 2010). A longer life expectancy, lower birth and mortality rates, and modern type of reproduction represent this phase which is also called as “modern stability” period. With this phase, rapid population growth ends because the birthrate is controlled with self-regulation methods (Rimashevskaia et al., 2013).

Shortly, according to demographic transition theory, the population growth becomes rapid when the ratio of death declines and the ratio of fertility remains high. After a while, balances change due to socioeconomic and technological developments, then the fertility rate starts to decrease, and the population growth rate goes down or decelerates. In modern times, demographic transition is effected by improved health care and education, urbanization, improved nutrition, and women’s personal development and their wish to have a small family (Yaakop and Nor, 2013). As we look at the transition phase of the countries, it is possible to say that 60 countries worldwide had made the transition to the modern type of reproduction. The rest of the nations are still in different phases of demographic transition (Rimashevskaia et al., 2013).

1.3 SOCIAL AND ECONOMIC IMPLICATIONS OF DEMOGRAPHIC TRANSITION

Starting with a moderate population growth rate in earlier history, the world has been witnessing an unabated population growth for over 250 years. The maximum increase has been experienced between the years of 1930–1990 and its ratio was 1.75% per year (Reher, 2012). However, there are certain historical events that are determinants on fertility and mortality rate. For instance, after World War II the world witnessed a significant decrease in the ratio of mortality because it was the end of a bloody war and there were improvements in the standard of living in terms of health, control of illnesses, and preventive medicine (Bhende and Kanitkar, 1978). Due to birth control methods, fertility rates showed a decline in developing countries after the 1960s except for most African countries where socioeconomic development was so poor (Caldwell et al., 1992). Modernization and industrialization in developed countries resulted in the demographic transition (Agyei, 1988). Although there has been a decrease in the population growth during the past 40 years, the growth continues to be strong. As we look back to history, it is apparent: the world population was 791 million in 1750 and it is 7 billion today. However, recently there are indications that the population growth rate will continue to decrease in the future because low fertility is getting more and more common in societies. This pattern of growth is an explicit indicator of demographic transition (Reher, 2012). The demographic transition has significant societal and economic outcomes that are essential for the emergence of modern societies. It is a period of change that is in favor of social and familial change and/or progress (Dyson, 2010).

Firstly, population age structure is definitely affected by the demogaphic transition; the fertility rate is the responsible factor for it. The young generation and working-age population are shaped by the demographic transition. Low fertility means older age structure and lower rate of labor (Bloom et al., 2002). The population age structure has important results for the future of the society and its implications will be clearly seen in the long term. Labor force may not be sufficient if the process of aging continues faster than expected.

As the roles of women change in the society, they have begun to take part in working life. The women have become more knowledgeable and conscious about birth control methods, raising healthy children, and personal development. Women’s active participation in the society has changed the family structure, declined the importance of marriage, and the number of children (Reher, 2011). This development has also resulted in delayed marriages, as a result, the proportion of unmarried women whose ages are 30 or older has increased. The fertility rate has been affected by the trend (Yaakop and Nor, 2013).

The demographic transition also affects the living standards and life expectancy. Longer life expectancy mak...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• About the Editors
• Table of Contents
• Dedication
• Biographies
• Contributors
• Abbreviations
• Preface
• Introduction
• PART 1: DEMOGRAPHIC TRANSITION
• PART 2: ECONOMIC GROWTH AND DEVELOPMENT
• PART 3: THIRD WORLD ECONOMIES
• Glossary
• Index