Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

by Abhijit V. Banerjee

Malthus believed that the resources countries have are more or less fixed (his favorite example was land), and he therefore thought that population growth was bound to make them poorer.5 By this logic, the Black Death, believed to have killed half of Britain’s population between 1348 and 1377, should get credit for the high-wage years that followed. Alwyn Young, an economist at the London School of Economics, recently reinstated this argument in the context of the current HIV/AIDS epidemic in Africa. In an article entitled “The Gift of the Dying,” he argued that the epidemic would make future generations of Africans better off by reducing fertility.6 This reduction of fertility occurs both directly, through the reluctance to engage in unprotected sex, and indirectly, because the resulting labor scarcity makes it more attractive for women to work rather than have babies. Young calculated that in South Africa in the coming decades, the “boon” of a reduced population would be large enough to outweigh the fact that many of the AIDS orphans would not get a proper education; South Africa could be 5.6 percent richer in perpetuity as a direct consequence of HIV. He concluded by observing, no doubt for the benefit of his more squeamish readers, “One cannot endlessly lament the scourge of high population growth in the developing world and then conclude that a reversal of such processes is an equal economic disaster.”