By Eric Kemp-Benedict. As part of a CPWF September 2011 workshop in Thailand regarding global drivers. We have divided driver types into five categories: 1. Demographic/Social, 2. Economic, 3. Political/Institutional/Legal, 4. Environmental/Climate change, 5. Technological/ Innovations

1. Demographic, Social, and
Economic Drivers
Eric Kemp-Benedict
Global Drivers Topic Working Group
Chiang Mai, 12 Sept 2011

2. DEMOGRAPHICS

3. Demographic Drivers
• Natural growth
– The demographic transition
• Migration
– Who? Why?
– Out-migration, in-migration, rural-urban
• Population structure
– AIDS
• Density
– Pressure on land and water resources
– Inheritance and division of land

4. http://www.nssgeography.com/worldissues%20web/Unit%20population/What%20i
s%20the%20Demographic%20Transition%20Model.htm

6. Demographic Profile of Botswana, with
and without AIDS, 2005 & 2020
http://www.iss.co.za/pubs/papers/107/Paper107.htm http://www.ifad.org/operations/regional/pf/aids_1.htm

7. Population Pressure
• Rising population density leads to…
– Malthus
• Land degradation
• Impoverishment
– Boserup/Simon
• Innovation
• Productivity improvement
• Environmental protection
– Kates et al.
• Yes

8. Demographics: Approaches
• UN population projections
– National (to 2050/2100)
– By age group and gender
– Urbanization (to 2035)
• National government projections
• Cohort models
• Note
– International labor migration is well-studied but not
well-modeled
– Regional migration often treated with a “gravity
model”

9. ECONOMICS

10. Economic Drivers
• Income • Economic structure
– Level – Agriculture and
• GDP: total economic value mining, industry, services
– Productive activities or
– Income or
• Structure of trade
– Consumptive activities – Primary goods, manufactured
• GDP per capita goods, services
– Growth rate • Investment
• Prices – Inflows, outflows, domestic
– Level • Heterogeneity
– Volatility – Between regions
– Terms of trade – Between urban and rural
– Between groups
– Between individuals

11. Basins Along the Development
Trajectory
Kemp-Benedict, Eric, Simon Cook, Summer L. Allen, Steve Vosti, Jacques Lemoalle, Mark
Giordano, John Ward, and David Kaczan. “Connections between poverty, water and
agriculture: evidence from 10 river basins.” Water International 36, no. 1 (2011): 125.

14. Savings, Investment, and Exports
• A basic relationship in international economics is that savings
minus investment equals net exports:
GDP as Consumption GDP as Production
Consumption Consumption goods
+ +
Savings = Investment goods
+ +
Imports Exports
Balance of Trade
C +S+M = C+I+X
- Capital – I
S Account = X–M
Current Account
• So, if savings are relatively low, and a country brings in FDI, it
must be a net importer: it is importing machinery to make its
goods

15. Does it Happen in Reality? Yes…

16. Economics: Approaches
• Previous studies • Partial economic model
• National government – Growth model
projections • Capital accumulation
• Exogenous or endogenous
• Historical comparison growth
– Will be like the past – Sectoral/partial
– Will differ from the equilibrium
past, but be like – Empirical/econometric
country/basin X
• “Full” economic model
– General equilibrium
– Disequlibrium
– Necessarily omit key
aspects of real economies

17. A Simple Growth Model
Y = Y agric + Y non-agric = πagric Aagric + πnon-agric L non-agric
L non-agric = P urb f active,urb r part, urb
Y urb Y rur
y urb = , y rur =
P urb P rur
UN population projections
Historically based, World Bank, or scenario (e.g., Malthus-Boserup continuum)
Historically based, FAO, and scenario

18. SOCIAL

19. Social Drivers
• Norms and values
– Generational experience
• Social capital
• Social inequality
– Class/income
– Ethnic/linguistic/religious
– Gender
– Etc.

20. Global Social Drivers
• Contact with relatives who have moved away
• Exposure to foreign ideas and norms (television &
radio, news, internet, school)
• Professional exchanges
• Tourism and other foreign travel (either outward
or inward)
• Commodities and services
• Foreign domestic investment
• Foreign aid & international NGOs

21. Changing Norms
• Societies & people carry a bundle of (potentially
conflicting) identities
• New identities can be added, and old ones
attenuated (and even lost)
• Time scales:
– Switching identities
• Can be very rapid
• The raw material for “political entrepreneurs”
– Adding and losing identities
• Typically slow, ~2 generations
• Might only be hidden/latent

22. Inequality
• Generally does not change
• When it does change, can be
– Internal reforms (gradual): US, UK,
China
– Revolutionary reforms (rapid): Soviet
Union, Cuba, revolutionary France
• Affected by
– History (particularly colonial history)
– Labor markets and economic structure
– Politics
• Extractive vs. redistributive vs.
“reinvestment”

23. Social: Approaches
• Narratives
• Formal qualitative models
• A handful of quantitative models, maybe

24. PULLING IT TOGETHER

25. Links
• Demographic transition
– Economic level  population growth
• Gravity model
– Relative wage level & population  migration
• Social capital
– Inequality (& income level)  social trust
• Globalization and development
– Trade & labor migration  norms & values
– Economic growth  norms & values

26. Assets and Institutions Along the
Development Trajectory
Kemp-Benedict, Eric, Simon Cook, Summer L. Allen, Steve Vosti, Jacques Lemoalle, Mark
Giordano, John Ward, and David Kaczan. “Connections between poverty, water and
agriculture: evidence from 10 river basins.” Water International 36, no. 1 (2011): 125.

27. Summary
• Importance
– Demographic, economic, and social drivers are important and interconnected
• Future
– Demographics: much built-in inertia, but the details are highly uncertain
– Economics: considerable uncertainty and variability, with bounded rates of
change
– Social: rapid change is possible, but typically change is on generational time
scales; future is highly uncertain, but there is a “globalism” syndrome
• Modeling
– Might not be necessary: take off the shelf, use historical rates, rely on
narrative; otherwise, simple models may do the trick
• Responses and adaptation
– Demographics: migration, innovation
– Economics: diversification, storage, foreign reserves, capital controls, [price
supports, tariffs, subsidies, import controls]
– Social: adoption/assimilation of imported ideas, resistance

28. ADDITIONAL

29. Trade Imbalances, 1960
http://rs.resalliance.org/2008/09/11/shipping-containers/

30. Trade Imbalances, 2000
http://rs.resalliance.org/2008/09/11/shipping-containers/