On Demographic Determinism

I am just reading the Bloom and Sachs paper I referred to in the last post.

I have come to a very interesting extract. They wish to defend themselves from the charge of being 'geographic determinists'. They state the following:

"Our paper could well be misunderstood. Some will regard it as a new case of "geographic determinism," that Africa is fated to be poor because of its geography. Some will regard it as a distraction from the important truth that geographic difficulties or not, African governments seriously mismanaged economic policy in the past generation. Let us therefore be clear at the outset. We believe emphatically that economic policy matters, and our formal econometric results show that to be true, a point we have also made in related recent studies (especially Sachs and Warner, 1997) We nonetheless focus most of our attention on geography for three reasons. First, there is little to be gained from yet another recitation of the damage of statism, protectionism, and corruption on African economic performance. Amen. Second, most economists are woefully neglectful of the forces of nature in shaping economic performance, in general and in Africa in particular. They treat economies as blank slates, upon which another region's technologies and economic history may be grafted. Our profession's formal models tend to be like that; so do our profession's standard statistical analyses of cross-country growth....Third, and perhaps most importantly, good policies must be tailored to geographical realities.If agricultural productivity is very low in Africa for climatological reasons, perhaps the real lesson is that growth should be led much more by outward-oriented industry and services, rather than yet another attempt to blindly transplant "integrated rural development" strategies from other parts of the world that are not customized to Africa’s unique conditions."

OK, now let me tailor this a little bit to my own situation:

My arguments could well be misunderstood. Some will regard them as a new case of "population determinism.". Let me therefore be clear at the outset. I believe emphatically that economic policy matters. I nonetheless focus most of my attention on demography for three reasons. First, there is little to be gained from yet another recitation of the fact that In euro area countries and Japan, the key contribution to help ensure an orderly reduction in global imbalances is through measures to boost growth and domestic demand ( Laxton and Milesi-Ferretti). Amen. Second, most economists are woefully neglectful of the forces of demography in shaping economic performance, in general and in the OECD world in particular. They treat economies as blank slates, upon which another region's structural policies and economic and social model may simply be grafted. Our profession's formal models tend to be like that; so do our profession's standard statistical analyses of cross-country growth....Third, and perhaps most importantly, good policies must be tailored to demographic realities.If domestic demand growth is very low in Germany and Japan for sound demographic reasons, perhaps the real lesson is that growth should be led much more appropriate demographically related structural policies, rather than yet another attempt to blindly transplant "structural reform" strategies from other parts of the world that are not customized to the unique conditions of rapidly ageing societies.


Am I making sense?

Incidentally, if you want to know what the relevance of this linked paper is to the demographic transition age structure argument, read section III which begins on page 22. Sachs is one of the crew.