Population Growth and Economic Development in Pakistan

Abstract

There is divergence of opinion regarding the consequences of population growth for economic development. Some view rapid population growth as a real problem while others assert that it is not a matter of grave concern. Cross-national evidence on the relationship between population growth and economic growth is inconsistent because the underlying parameters and assumptions vary across countries. Country-specific studies are more useful for illuminating unique features of a country. In this article, I examine Pakistan's case of population growth and economic development. Between 1950-2001, Pakistan's population increased 430 percent. Multivariate analyses of 1981 to 2005 data from the Pakistan Economic Survey and from the International Financial Statistics yearbooks found significant and negative relationship between population growth and measures of economic advancement. These results demonstrate that rapid population growth is a real problem in Pakistan because it contributes to lower investment growth and diminishes the savings rate. Today foreign investment and export promotion have only a small impact on Pakistan's economic growth. Owing to its rapid population growth, Pakistan has among the world's highest dependency ratios. Policy makers can address these serious economic consequences of rapid population growth by investing in family planning services. Development of independent media and liberal education in educational institutions will in time also help by encouraging a smaller family size ideal.