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So Why Is Manhattan Much Richer than Malawi?

Here’s a letter to the New York Times:

Reporting on Nigeria’s growing population, Elisabeth Rosenthal uncritically advances the popular narrative that large populations hamper economic development (“Nigeria Tested by Rapid Rise in Population,” April 15).  She supports her point with demographer Peter Ogunjuyigbe’s declaration that “If you don’t take care of population, schools can’t cope, hospitals can’t cope, there’s not enough housing – there’s nothing you can do to have economic development.”

Not so.

Fifty countries today have population densities higher than that of Nigeria.*  Forty-two (or 84 percent) of these have per-capita incomes higher than that of Nigeria – and in many cases multiple times higher.  South Korea, for example, has three times as many people per square mile as does Nigeria, yet South Korea’s per-capita income is more than ten times higher than Nigeria’s.**

Nor does rapid growth of population necessarily prevent rapid growth of the economy.  Over the past 150 years, California has had an average annual population growth rate of about 3.1 percent.  (In some periods it’s been much higher, such as in the 1920s when California’s population grew at an average annual rate of 5.2 percent.)***  Only in the past 40 years has California’s annual population growth rate fallen below Nigeria’s current annual population growth rate of about 2.27 percent.****  Yet, obviously, this hefty population growth can hardly be said to have been a drag on California’s economy.

Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA  22030

* Figures gotten here.  (I count Taiwan as a sovereign nation.)

** Calculated from the CIA World Factbook

*** All calculated, solving for r, using the formula PopX = PopY (1 + r) “to the” n  — where “r” is the annual rate of population growth; “PopX” is population in the latter year; “PopY” is population in the earlier year; and “n” is number of years.

I got figures on California’s population here.

**** I use the U.N. figure for the years 2005-2010 (found in the left-hand column).