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Surprise! Prosperity, Not Poverty, Better Correlates with Population Density

Analysis by Suresh Chandra

Please hear me out. Here are charts of prosperity vs. population density for Europe and Asia. The data are from 2005 CIA World FactBook.
Europe Asia

The population “explosion” theory of poverty pontificated by population pundits goes like this: “Rich nations like the U.S., Canada and Australia are all thinly populated, while countries with “exploding” populations, like India, China and Indonesia, are all poor. That just proves that poverty in the world is caused by population (density) explosion." I too used to subscribe to this view until my brother argued with me and pointed out that some of the prospering nations in Europe and Asia, in fact, were quite densely populated.

I now realize that the above mentioned logic to connect between poverty with population is fallacious. U.S., Canada and Australia are relatively new countries, formed as a result of takeovers of nearly empty lands by people from high-density Europe. In order to reach a sensible conclusion about any cause-&-effect connection between population density and poverty, we need to (1) look at all the data, and (2) compare countries that have more in common in terms of geography and history. When we do that, we find that prosperity, not poverty, better correlates with higher populations density. Surprise! In Europe, The Netherlands, Germany and Great Britain have higher population densities and higher per capita incomes and GDP than Spain, Greece or Turkey. The same thing is true in Asia. Taiwan, Japan and South Korea have higher population densities than India, Mongolia or Myanmar.
 
Africa Old World

All the charts are based on CIA World FactBook data on population, area, and per capita GDP downloaded in November, 2005. The data analysis is limited to 152 countries that have populations of  more than one million and an area of at least 1100 sq. kilometers. (The city-state of Singapore was excluded since it is not typical of countries. Inclusion of Singapore would have only accentuated the positive correlation between population density and prosperity.) Although there is large scatter in all the plots, the trend lines are all found to be positive indicating a positive correlation between population density and prosperity.

Even when we compare the U.S., Canada, and Australia, (countries similar in size, history, culture, language) the prosperity-population trend line turns out to have a positive slope. The fact that the U.S. has 10 times the density of Canada and Australia, doesn't seem to hurt anything. But, when we plot all the new world countries together, we do find a negatively sloping trend line -- finally! Aha!
CUA New World
 

World Countries in Quadrants:

However, when we look at the total picture that includes countries from both old and new worlds, we still find a positive correlation between prosperity and population density.
 
World Countries & averages

The world chart includes all 152 countries, with a total population of 6,419,815,400, a land area of 132,544,424 square kilometers, and a GDP of $55,484,554,500. This averages out to 48.4 person/square-kilometer, shown with vertical pink line on the chart. The green horizontal line marks the average GDP of $8,643 per capita. The pink and green lines divide the chart into four quadrants:

Quadrant Population density Prosperity Work productivity
Q1 Low Low Low
Q2 High Low Low
Q3 High High High
Q4 Low High High

Quadrant Q1: Represents countries that are thinly populated and poor. This quadrant is dominated by African countries and includes many Asian countries.

Quadrant Q2: Represents countries that are densely populated and poor. This quadrant is typical of Asian countries.

Quadrant Q3: Represents countries that are densely populated and prosperous. This quadrant is typical of Europe.

Quadrant Q4: Represents countries that are thinly populated and prosperous. This quadrant is typical of the Americas and Scandinavian countries.

 
Netherlands, Japan and Germany, respectively, have population densities 8, 7 and 5 times the world average.

"Population Explosion" Applied to Struggling Countries Only?

The way the term "population explosion" has been applied, you would think that only poor and struggling countries in Asia, Africa and Latin America have large population densities. When did you about "exploding" populations of an European country or Japan? In fact, Netherlands, Japan and Germany, respectively, have population densities that are 8, 7 and 5 times the world average (of 48.4 persons per square kilometer).

The term "population explosion" is also used as a popular excuse by people of poor countries themselves for their state of economic affairs. The point of focus is often the "mouths to feed." To me, the real problem seems not so much as that of population but the work productivity. For every one "mouth to feed" there are two hands that can produce food, goods and services. The trick is to put those hands to work.

In 1960's and 1970's, when India's population was one-half of what it is today, the country India was called a hopeless basket case. Further, it was said that the country had to control “population explosion” first before there could be a hope for economic salvation. Now that the country's population is double what it was then, hardly does anybody seem concerned about any population explosion. Why? Is it because the bigger productivity "explosion" has overtaken the population "explosion"?

I believe the use of the term "population explosion" is counterproductive for two reasons. One is that the message sent creates a sense of helplessness because there is little the people can do about the perceived population explosion in the short term. Secondly it means barking up a wrong tree. The greater culprit in the equation is the poor economic productivity the countries' people. It is a simple thing: When people produce more than they consume, they are an asset. If they consume more than they produce, they are a liability.

I am not an economist or a sociologist, but that does not keep me from trying to make sense for myself the low economic productivity problem in poor countries. I view the problem in terms of what I call C5 problem: corruption, culture, communication, capital, and creativity. Some of these C's require external help but others are a matter behavior. (I will share my more detailed thoughts later in a separate article.)

Finally, I hasten to add that I am certainly not for ignoring potential problems arising out of increasing world population, but only for keeping perspective. There can be little debate that increasing world population will put strain on the world ecology. So will also prosperity.

Summary Conclusions:

  • Prosperity appears to be better correlated with high population density than is poverty!
     
  • Mexico and Iran seem good representations of the averaged world conditions in terms of prosperity and populations density.
     
  • Averaged population density (48.4 persons/sq. km.) of the 152 world countries is merely 21% that of Germany (231 persons/sq. km.). The average GDP per capita is 30% that of the Germans.
     
  • If the rest of the world had the population density of Germany, there would be nearly five times as many people in the world as there are today.
     
  • The cause of poverty in the world is not populations "explosion" but poor work productivity.
     
  • The perceived "population explosion" has been used as explanation by outsiders and as excuse by people of poor nations as -- mostly, Asian, African and Latin. When did you hear about the term "population explosion" used in context of Europe or Japan?
     
  • Talk of "population explosion" misses the point: productivity and "can do". For every "mouth to feed" there are two hands that could produce goods/services. Talk of "population explosion" only creates a sense of helplessness and immobility by focusing attention on a perceived problem that nothing can be done about in near term.
  • High world population has potential to strain ecology; so does prosperity.

Appendix

Sources of data (accessed November 20, 2005):

Only countries with (a) population greater than one million people and (b) area bigger than 1100 square kilometer are included.

The West Bank, even though listed as a "country" in the FactBook, is not included; its inclusion would not significantly change any conclusions.

   Country   Population  Population density per
sq. km.		 GDP/capita in
thousand $s
1  Afghanistan  29,928,987 46 0.8
2  Albania  3,563,112 124 4.9
3  Algeria  32,531,853 14 6.6
4  Angola  11,827,315 9 2.1
5  Argentina  39,537,943 14 12.4
6  Armenia  2,982,904 100 4.6
7  Australia  20,090,437 3 30.7
8  Austria  8,184,691 98 31.3
9  Azerbaijan  7,911,974 91 3.8
10  Bangladesh  144,319,628 1002 2
11  Belarus  10,300,483 50 6.8
12  Belgium  10,364,388 340 30.6
13  Benin  7,649,360 68 1.2
14  Bhutan  2,232,291 47 1.4
15  Bolivia  8,857,870 8 2.6
16  Bosnia and Herzegovina  4,430,494 87 6.5
17  Botswana  1,640,115 3 9.2
18  Brazil  186,112,794 22 8.1
19  Bulgaria  7,450,349 67 8.2
20  Burkina Faso  13,491,736 49 1.2
21  Burma  46,996,558 69 1.7
22  Burundi  7,795,426 280 0.6
23  Cambodia  13,636,398 75 2
24  Cameroon  16,988,132 36 1.9
25  Canada  32,805,041 3 31.5
26  Central African Republic  4,237,703 7 1.1
27  Chad  9,657,069 8 1.6
28  Chile  15,980,912 21 10.7
29  China  1,306,313,812 136 5.6
30  Colombia  42,954,279 38 6.6
31  Congo, Democratic Republic 60,764,490 26 0.7
32  Congo, Republic of the  3,602,269 11 0.8
33  Costa Rica  4,016,173 79 9.6
34  Cote d'Ivoire  17,298,040 54 1.5
35  Croatia  4,495,904 80 11.2
36  Cuba  11,346,670 102 3
37  Czech Republic  10,241,138 130 16.8
38  Denmark  5,432,335 126 32.2
39  Dominican Republic  9,049,595 186 6.3
40  East Timor  1,040,880 69 0.4
41  Ecuador  13,363,593 47 3.7
42  Egypt  77,505,756 77 4.2
43  El Salvador  6,704,932 319 4.9
44  Eritrea  4,669,638 38 0.9
45  Estonia  1,332,893 29 14.3
46  Ethiopia  73,053,286 65 0.8
47  Finland  5,223,442 15 29
48  France  60,656,178 111 28.7
49  Gabon  1,394,307 5 5.9
50  Gambia, The  1,595,086 141 1.8
51  Georgia  4,677,401 67 3.1
52  Germany  82,431,390 231 28.7
53  Ghana  21,946,247 92 2.3
54  Greece  10,668,354 81 21.3
55  Guatemala  12,013,907 110 4.2
56  Guinea  9,452,670 38 2.1
57  Guinea-Bissau  1,413,446 39 0.7
58  Haiti  8,121,622 293 1.5
59  Honduras  7,167,902 64 2.8
60  Hungary  10,006,835 108 14.9
61  India  1,080,264,388 329 3.1
62  Indonesia  241,973,879 126 3.5
63  Iran  68,017,860 41 7.7
64  Iraq  26,074,906 60 2.1
65  Ireland  4,015,676 57 31.9
66  Israel  6,276,883 302 20.8
67  Italy  58,103,033 193 27.7
68  Jamaica  2,735,520 249 4.1
69  Japan  127,417,244 337 29.4
70  Jordan  5,759,732 62 4.5
71  Kazakhstan  15,185,844 6 7.8
72  Kenya  33,829,590 58 1.1
73  Korea, North  22,912,177 190 1.7
74  Korea, South  48,640,671 494 19.2
75  Kuwait  2,335,648 131 21.3
76  Kyrgyzstan  5,146,281 26 1.7
77  Laos  6,217,141 26 1.9
78  Latvia  2,290,237 35 11.5
79  Lebanon  3,826,018 368 5
80  Lesotho  2,031,348 67 3.2
81  Liberia  2,900,269 26 0.9
82  Libya  5,765,563 3 6.7
83  Lithuania  3,596,617 55 12.5
84  Macedonia  2,045,262 81 7.1
85  Madagascar  18,040,341 31 0.8
86  Malawi  12,707,464 107 0.6
87  Malaysia  23,953,136 73 9.7
88  Mali  11,415,261 9 0.9
89  Mauritania  3,086,859 3 1.8
90  Mauritius  1,230,602 603 12.8
91  Mexico  106,202,903 54 9.6
92  Moldova  4,455,421 132 1.9
93  Mongolia  2,791,272 2 1.9
94  Morocco  32,725,847 73 4.2
95  Mozambique  19,406,703 24 1.2
96  Namibia  2,030,692 2 7.3
97  Nepal  27,676,547 197 1.5
98  Netherlands  16,407,491 395 29.5
99  New Zealand  4,035,461 15 23.2
100  Nicaragua  5,465,100 42 2.3
101  Niger  12,162,856 10 0.9
102  Nigeria  128,765,768 139 1
103  Norway  4,593,041 14 40
104  Oman  3,001,583 14 13.1
105  Pakistan  162,419,946 202 2.2
106  Panama  3,140,232 40 6.9
107  Papua New Guinea  5,545,268 12 2.2
108  Paraguay  6,347,884 16 4.8
109  Peru  27,925,628 22 5.6
110  Philippines  87,857,473 293 5
111  Poland  38,557,984 123 12
112  Portugal  10,566,212 114 17.9
113  Puerto Rico  3,911,299 430 17.7
114  Romania  22,329,977 94 7.7
115  Russia  143,420,309 8 9.8
116  Rwanda  8,440,820 320 1.3
117  Saudi Arabia  26,417,599 13 12
118  Senegal  11,706,498 60 1.7
119  Serbia and Montenegro  10,829,175 106 2.4
120  Sierra Leone  5,867,426 82 0.6
121  Slovakia  5,431,363 111 14.5
122  Slovenia  2,011,070 99 19.6
123  Somalia  8,591,629 13 0.6
124  South Africa  44,344,136 36 11.1
125  Spain  40,341,462 80 23.3
126  Sri Lanka  20,064,776 306 4
127  Sudan  40,187,486 16 1.9
128  Swaziland  1,138,227 66 5.1
129  Sweden  9,001,774 20 28.4
130  Switzerland  7,489,370 181 33.8
131  Syria  18,448,752 100 3.4
132  Taiwan  22,894,384 636 25.3
133  Tajikistan  7,163,506 50 1.1
134  Tanzania  36,766,356 39 0.7
135  Thailand  64,185,502 125 8.1
136  Togo  5,399,991 95 1.6
137  Trinidad and Tobago  1,075,066 210 10.5
138  Tunisia  10,074,951 62 7.1
139  Turkey  69,660,559 89 7.4
140  Turkmenistan  4,952,081 10 5.7
141  Uganda  27,269,482 116 1.5
142  Ukraine  46,996,765 78 6.3
143  United Arab Emirates  2,563,212 31 25.2
144  United Kingdom  60,441,457 247 29.6
145  United States  295,734,134 31 40.1
146  Uruguay  3,415,920 19 14.5
147  Uzbekistan  26,851,195 60 1.8
148  Venezuela  25,375,281 28 5.8
149  Vietnam  83,535,576 253 2.7
150  Yemen  20,727,063 39 0.8
151  Zambia  11,261,795 15 0.9
152  Zimbabwe  12,160,782 31 1.9

 

 

Updated: 30 Nov 2005

 

© 2005 Suresh Chandra

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