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5 Do lower population densities lead to lower per capita incomes via a reduced stimulus to technological innovation and reduced exploitation economies of scale in production and infrastructure?
Pages 47-52

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From page 47...
... It can also be argued that the possibilities of realizing any economies of scale Trough international trade and of adapting technology developed by developed countries would make this proposition false for contemporary developing counties. This discussion distinguishes between manufacturing and agriculture and between changes that make it possible to use factors in different proportions and changes that yield more output for factors used in given proportions.
From page 48...
... The nature of these economies suggests that national size and population density should be of little relevance, except insofar as they provide a large enough market to allow the industry to reach a sufficient size within at least one city (Henderson, 1985~. It is also thought that these localization economies occur primarily for goods that are produced using technology (imported from developed countries)
From page 49...
... The argument has been made in great detail that technological change in Englandin contrast to the United States-was historically guided in the direction of saving capital rather Han labor, reflecting the relative scarcities of factors in these countries (Haba~uk, 1962; David, 1975~. In many contemporary developing countries, however, a variety of government policies distort local factor prices so severely that there is no incentive to develop techniques that exploit the relative abundance of labor.
From page 50...
... It is useful to distinguish three different aspects of technological change: first, change in the basic agrarian system in use, with each system employing factors in different proportions; second, the direction of technological change, in the sense that new knowledge tends to economize on either land or labor within any given agrarian system; and third, the pace of technological change. Examples of agrarian systems, running from least to most intensive use of labor, include forest fallow, bush fallow, grass fallow, annual cropping, and multicropping, each win its distinctive tools and over features.
From page 51...
... This review of the evidence suggests Hat population density strongly influences the choice of agrarian system and the direction of technological change. But there is nothing in these arguments to suggest that denser or more rapidly growing populations are better off; rather, they show that the choice of system and direction of technological change typically adjust to the negative effects of higher density and more rapid grown.
From page 52...
... It seems unlikely that the stimulative effects of increased population density on agricultural productivity could more than offset the effects of diminishing returns to labor (discussed under Question 2~. Thus, for most developing countries, slower population growth is unlikely to result in a net reduction in agricultural productivity and might well raise it.

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