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Population: A Tale of Two Worlds (Part II)

April 18, 2023 | Posted in: Wealth Strategies

A faithful reader emailed me a fascinating question following his review of my recent white paper on global population growth: Was I was able to discern any differences in population trends for democracies versus authoritarian countries? Population growth for a given country is a function of the difference between the number of births and deaths plus net migration. Prior to doing further research, I guessed that autocratic countries would experience comparatively low or even negative population growth because:

• They would experience outward migration by those seeking more personal freedom.
• They would experience low birth rates because parents would not want to raise children in an autocratic environment.
• They would experience high death rates because of poor morale, poverty, and government brutality.

Well, my guesses were basically wrong. The Economist publishes an index that rates the degree of democracy in various countries based on sixty different indicators. I compared population growth in each country to its democracy score and found a surprising relationship. While there is a good deal of noise, the most democratic countries tend to experience low or even negative population growth while many of the more authoritarian countries have surging populations!

The horizontal axis of this chart depicts the degree of democracy with numbers close to zero representing autocracies and scores approaching one representing highly democratic countries. The vertical axis portrays annual percentage growth in population and each of the dots represents a country. Note that the jumble of dots slopes irregularly downward to the right signifying a tendency for the democracies to experience little population growth. And, some of the autocracies have very high growth rates.

Given this surprising outcome, the next step was to look under the hood at the underlying variables. With respect to migration, there was a positive but not terribly strong relationship between the level of democracy and net population inflows. While the most democratic countries do enjoy moderate population inflows, a few of the authoritarian countries also have strong inflows although some also have significant outflows. So, immigration does not seem to be the answer to the puzzle.

Next, I looked at the number of deaths versus the quality of a given country’s democracy and found a weak but surprising outcome. The more democratic countries have a modestly higher death rate than their autocratic counterparts! Death rates are a function of genetics, nutrition, personal behavior, the availability and quality of healthcare, and a number of other variables. Unfortunately, I do not have a complete explanation. However, I wonder if the answer lies in the fact that the strong democracies tend to be relatively wealthy countries with associated health issues such as diabetes, obesity, and opioid use. Additionally, many of the authoritarian countries have relatively young populations.

The fertility rate is the underlying variable with the most explanatory power. This statistic measures the number of lifetime births per woman ranging from .78 in South Korea to 6.9 in Niger. As it turns out, the most democratic countries are generally quite mature societies with very low fertility rates whereas many authoritarian countries have relatively high rates. Many factors influence the fertility rate including educational and career opportunities for women, the availability of contraception, income levels, and cultural norms. Another very important factor is the incidence of infant mortality in that high rates motivate families to produce more children as a source of economic stability and support. Once again, I do not have a complete explanation, but many of the most autocratic countries are also quite poor, do not provide opportunities for women beyond the home, and experience a high incidence of infant mortality.

I often rail against simplistic solutions to complex problems and take every opportunity to remind my readers of the importance of second order thinking and unintended consequences. Well, this is a great example of the risk of preconceived notions, snap judgments and sound bites. As is the case with most “cosmic” questions, this one entails a large number of underlying and often conflicting factors that defy easy explanation. I am reminded of the title of that great Jack Nicholson movie, It’s Complicated.