Disease, Population, and Economic Progress

Un post de Gary Becker en el blog de Becker y Posner sobre las causas de la pobreza. Si bien aplica más que nada a países como la India, creo que mucho de lo que dice aplica perfectamente a la Argentina:

"India’s real problem was not population, but terrible economic policies that overregulated labor and product markets, blocked domestic investments by native entrepreneurs, and discouraged imports of goods and foreign investments. Reductions in tariffs and import quotas, and greater encouragement to private investments introduced in 1991 by the then Finance Minister, Dr. Manmohan Singh (who is now Prime Minister), quickly produced a take off in India’s economy. Income has since been growing by over 6% per year, “despite” an increase in its population by more than 200 million persons that raised India’s total population to over one billion people."

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Disease, Population, and Economic Progress

Disease, Population, and Economic Progress-Becker
Premature deaths from malaria, sleeping sickness, AIDS, and other diseases are still common in most parts of sub-Sahara Africa and other very poor nations. Modern day Malthusians who believe population growth holds back economic prosperity believe that high death rates from disease, awful as that is, raise the earnings of the living by slowing the growth in population. They point to various historical episodes, especially to the economic revival in Europe following the population devastation caused by the Black Death in the 14th century.

Malthusian theory has considerable relevance in understanding economies in earlier times when traditional agriculture was the main sector. But population’s role in the modern world is very different because prosperity of families and countries depend on their investments in human capital, especially education and health, sensible government policies, and economies that are open to trade with other nations.

India provides a good illustration. India remained very poor from its independence in 1947 until the late 1980’s. Some claimed that its slow rate of growth in per capita income was largely explained by a rapid growth in population that absorbed much of the increase in aggregate income. In response to this belief, some Indian women were forcibly sterilized to cut down their birth rates.

Fortunately, a small number of economists and politicians recognized that India’s real problem was not population, but terrible economic policies that overregulated labor and product markets, blocked domestic investments by native entrepreneurs, and discouraged imports of goods and foreign investments. Reductions in tariffs and import quotas, and greater encouragement to private investments introduced in 1991 by the then Finance Minister, Dr. Manmohan Singh (who is now Prime Minister), quickly produced a take off in India’s economy. Income has since been growing by over 6% per year, “despite” an increase in its population by more than 200 million persons that raised India’s total population to over one billion people.

India’s problems prior to its economic reforms are magnified in much of Africa. In addition to misguided economic policies, widespread disease has lowered life expectancies and reduced health and energy levels, so that most young people have little incentive to become literate and continue their schooling beyond a few years. The heavy incidence of disease also has lowered productivity even in the traditional activities that engage most workers.

So I have little doubt that the rampant disease in Africa and other poor nations is a “curse to the living”, even though it helps keep population from growing faster. Greater spending on health by the governments of these nations, and international assistance from philanthropic and other groups, would reduce the incidence of malaria, AIDS, and other major diseases, and would raise per capita incomes along with the number of people. Incomes would grow because healthier persons invest more in education and other human capital, and they are more productive and energetic. Quantitative studies confirm that the heavy disease burden in Africa has reduced investments in education and lowered their rates of income growth.

Economic reforms that worked in other regions and cultures would also work in Africa. Their economic situation would be much better if they followed the examples set by India, China, and other nations, and reduced regulations and tariffs, encouraged domestic and foreign private investment, and provided a more receptive and stable economic environment. Reduced incidence of disease and better economic policies would raise population, but would raise incomes much faster, so that more people would live better lives.

My views about the effects of population in the modern world are very non-Malthusian in other ways as well. I believe that bigger populations become an asset rather than a liability to economic growth as societies become more knowledge-oriented through investments in education and training, and through new technologies. In the modern environment, a larger population raises productivity by inducing greater specialization in skills and occupations, and also by providing larger markets for different goods, including various drugs to treat diseases.

While this claim about the beneficial economic effects of larger populations may be controversial, there can be little doubt that widespread disease in Africa and other poor nations is a major drag on their economic progress, whatever the effects on the number of survivors. Malaria and other horrible diseases are a disaster for the living as well as a tragedy for those dying.