Group Project

1. Contraception and Development: Choice not chance
The Economist 14 July 2012
Overview of Article
• Most of the world has seen fertility fall, but some places have missed out the
demographic revolution i.e. the poorest countries ,having a fertility rate of 4.0 or above.
• According to UN projects their population will double from 850m in 2010 to 1.7 billion in
2050.
• This population growth is not all from choice. In countries where big families are the
norm, most parents say they want fewer children.
• According to the Guttmacher Institute in 2013 222m women of developing countries
aged 15 to 49 want or need contraceptive methods but cannot get them.
• Family planning is the planning of when to have children or to control the birth rates
using techniques to implement such plans which include using contraceptive coils.
• Contraception is cheap by rich countries standard but not for developing countries which
is why donations and government help is needed to provide modern contraception.
According to the article:
• The dependence ratio – the ratio of the economically dependent part of the population to
the productive part – will be large.
• The Guttmacher Institute estimated about 80m unintended pregnancies in developing
countries in 2012, resulting in 40m abortions, 10m miscarriage and 100,000 maternal death.
• The possibility of spacing births improves child health.
• For every $1 spent on contraception, developing countries would save $1.40 in maternal and
newborn health care.
Moreover:
• “Stretching-in” of country’s scarce resources
• Congestion and social problems
Costs of unwanted children
Population growth around the world
• As the 20th century began, the more developed countries were well into the shift
from high to low mortality and fertility known as the demographic transition. (see
box). Fertility in developed countries coincided with an increase of educated women
and the development of form of contraceptives. At the other extreme there were
countries where fertility remained high.
Demographic transition
As a country develop, they go through a
demographic transition:
 Stage I – underdeveloped countries
have right birth rates and high death
rates
 Stage II – as a country develop, death
rates fall but birth rates remain high
 Stage III- as a country develop
further, families will decide to have
fewer children
• Countries with the highest fertility rates per woman tended to have a much lower GDP than countries
with lower fertility rates.
• This is the result of several reasons: less education, children see as investment and insurance for the
old age, hidden momentum etc.
• At the same time, rapid population growth is typically considered to be bad for a country’s
development as it stretches thin capital, land and food resources, it can create congestion and social
issues and it may contribute to a country’s unemployment.
• This leads to a vicious cycle where high population growth causes low development, low development
contributes to high population grown, and so on.
For every stage, will take a long time for the population to stabilise.
Source: World health statistics 2007.
Poverty trap
incomes just to maintain their already low
standards of living.
• Low income leads to low investment
which contributes further to the country
remaining poor.
• There might be the need for a “big push”
• Investment means a delay in current consumption
• In poor countries people may need to consume all of their
Does family planning help?
As result of the London Summit on Family Planning held in London on July 11°, 2012 the United Kingdom Prime Minister, David Cameron,
announces £500 million in aid to increase international access to contraceptives.
Foreign aid is cash or in-kind transfers made from official governmental agenices with economic development and welfare as its official motive.
• They can help development by providing a «big push» to break the vicious circle.
• But they may be ineffective if not accompanied by structural change:
 If there is a huge injection of foreign aid in a particular country, the recipient country uses this aid to invest into new capital
 Because capital per worker is greater, output per worker will also be greater
 But if the technology,savings and population remain the same , all the new capital will just depreciate.
 This is beacuse the country is unable to maintain the increased capital per worker since the amount that is actuallly invested now
is less than the amount they need to invest in capital
 The foreign aid will thus be no effect
• Foreign aid can also cause Dutch disease, that is the raising the recipient country’s exchange rate
• And may perpetuate inefficient and corrupt government/policies
A policy alternative to “Big Push” would be to tackle directly the source of the problem, which is the demographic behaviour:
• The introduction of a family planning program may bring down fertility rates.
• This may increase income, which could, in turn, increase education levels perhaps further lowering fertility rates.
• Then break-even investment line would approach the straight line, eventually eliminating the poverty trap.
The most important thing, anyway, it is that all these policies even if they maybe can not promote growth, for sure they can reduce death and suffering.
Relevant economic principles
One of the ten economic principles is that people face trade-offs –
opportunity costs. This term was first coined by Austrian economist,
Friedrich von Wieser in 1914. The opportunity cost of a choice is “the
loss of other alternatives when one alternative is chosen”.
This principle is relevant to our selected issue because:
- For developing countries with high fertility rates, they also have a
high working population, which may be beneficial for their heavy
labour dependent sector. However, this also means that poor families
would have a higher amount of dependents and hence having adding
to their own subsistence needs – contributing to the poverty trap
- As written above, the Guttmacher Study suggests that for every $1
spent on modern contraception, developing countries would save
about $1.40 in maternal and newborn health care.
Sources
“Contraception and development – Choice not chance”, The Economist,
accessed March 2014,
http://www.economist.com/node/21558564
Thomas W. Merrick, “Population and Poverty: New Views on an Old
Controversy”, Guttmacher Institute, accessed March 2014,
http://www.guttmacher.org/pubs/journals/2804102.html
Nicholas Myers, “Development Economics - Part I” and “Development
Economics - Part II”
Made by Abirami Byju, Chiara Pansè, Giorgia Schina, Shui Sam Wong
Source: Guttmacher Institute, 2011