World Development Report 1984

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export restraints and orderly marketing agree- earlier rise had amounted to an annual transfer of ments, which violate the principles and rules of about 2 percent of GDP from the industrial coun- GATT. Estimates of the percentage of imports tries, or roughly half a year's growth. But much of affected by nontariff barriers are shown for this could, at least initially, be borrowed back (and selected industrial countries in Table 2.5. The more as the surplus available for borrowing fell between effective the nontariff barrier the less the actual 1975 and 1979 so did the real price of oil). Although value of imports that enter a country. Thus esti- the oil price increase was damaging to industrial mates are only illustrative of the relative degree of countries, it alone does not explain subsequent protection. There has also been a growing use of problems of slow growth, unemployment, and "less than fair value" provisions of trade law as a inflation except in the context of already existing form of harassment (see Box 2.1). economic rigidities. Quite apart from the threat to developing coun- Consider the labor market. The rise in the price tries, protection damages the industrial countries of energy lowered the real wage that was comthemselves. First, efficiency is reduced by actions patible with full employment. It also led to an that cut the link between domestic and interna- incentive to shift away from energy- and capitaltional prices. Second, there is an important added intensive forms of production toward more laborsource of uncertainty with potentially serious intensive methods. This substitution explains a effects for long-term, trade-oriented investment part of the observed slowdown in labor productivand thus for returns on investment. ity growth. Where the required reductions in real wages and real wage growth did not occur-as in Impact of rising oil prices some countries in western Europe-the productivity slowdown was small, but the oil price rise gave To understand the impact of the 1979-80 rise in oil a permanent upward boost to unemployment. prices, it is necessary first to consider the policy In industry some capital stock had become reactions to the jump in prices in 1973-74. That redundant as expectations for higher growth were punctured. The changing price of energy also accelerated the obsolescence of significant parts of TABLE 2.5 the capital stock, especially in such industries as Percentage of industrial countries' imports steel, shipbuilding, chemicals (including petrocovered by nontariff barriers chemicals), and motor vehicles. Governments Imports fromi then responded with increased attempts to prop Developed Developing up such industries with protection and subsidies. Inporter countries countries Despite the failure of real wages to adjust and the declining rates of return on corporate capital, United States 13.0 5.5. Japan 19.2 5.4 investment demand and then economic activity Switzerland 22.6 48.8 were partially sustained for nearly a decade by low Sweden 1.0 7.0 and sometimes negative real rates of interest. The Norwav 8.2 10.9 economic conditions of the late 1970s and the Austria 15.0 8.1 "debt crisis" which subsequently emerged in the Denmark 194 19.2 1980s can be understood only in terms of the pecu- Ireland 15.0 9.5 liar relationship through much of the 1970s France 20.1 7.1 between real wages, which tended to rise faster United Kingdom 14.9 14.3 than productivity, and real rates of interest, which Italy 12.5 7.0 stayed low. Germany, Fed. Rep. 12.6 8.5 Netherlands 16.1 19.8 Negative real rates of iterest spurred a rapid Belgium and Luxembourg 19.2 29.7 growth of borrowing, especially by the non-oil Note: This table is based on detailed information on nontariff developing countries. Although in the 1950s and barriers available in UNCTAD. The figures measure the value of 1960s the shares of different groups of countries in imports affected by nontariff measures in relation to total international lending changed only gradually, in imports. Import figures are from 1980, whereas the information the 1970s the non-oil developing countries' share on nontariff barriers applies to 1983. If a country's import restrictions are rigorous, it imports little and few of its imports rose sharply. The great increase in lending was are affected by restrictions. Thus these figures provide little largely the result of the oil producers' surplus. The basis for comparison among countries in the total amount of industrial countries were not large net borrowers restrictions.inutilcutiswrnolagnebroes a. Weighted average; excludes Greece. themselves; investment growth was sluggish in 18
*Box 2.1 Administered protection and the open international trading system C.n.3r.A \4rctniri '.n T ,rttl-. ;id pa,, '.r,nr tm,r; .-I kinMpiminr- 3nd impori bLut eight, c.i4e a.3Eking untair ira.de C ( 1 i .TT , .. -~rh ., C. ATT *.nlrciroetn trw.n l ~ri r..dr In 1-~2 ai-d j'-$A a r3iic. In add,ii.-.n it--rr.-.er., p.irt'. '.:.uld e !,..3p.~ rt,n' lot .,i -I ;.it. 3gu.r.i, in. I,-ij .3ii-'n4 % Li.- i e.f' inl.tan.X,~ oi irop-rI4 .91 par- t.c.:l-rnh1iiTmnnt i,m k.~-F ii, nl'rkoi int.3ted in th,. L'nitre '13-*:..nip.lrd ri.ulir pro...L: tr..-rr a. pr.:lrcountr., .'nhC Ihr,..U4JI. IIw- i.h.. , OI-- i ui_r lb _` 3.i* 11,i. Ing unt.)ir Isr.. pr.3c- .~ r gr up o'i Ci-untri,; c 'irninl Und*er tw-ri, -uc~h 3, the \rcI- I\ iitJ,-. l-_et Llnd.r L. -'TT n.,uc3 i.ri n c . 4unc .iII3nC. 'l'ur%.eillanc.3 in, -.2%e n- pr. - I-ri-.- AI Ih. -U Zh Iw he ir.,2_'U ard ; unt i.3rcrr.i. praoi-4~ :.3ri re>ult in d-- dnsr re-rricti'.rrns-4ur.-4 buI `. car Jai.b3. -culd A.311.. *.* Y~'.T inir...'.4 mprtirr-in.3.r rp-I.''i.' n-i in. c-n- I. rnlinl tn3t II lm M I T ,~l siontlru Imp'. ri r.'rIi(.t .. Ir ip,.rt..3rir I'niI- l-rnli-. .. ith th.: mrr--r Ii. nedrt ri.ti:0 r.,r*. rEe.rTi,tl.,n, michi te mp.C It a R, zt'rl IIr.r -.I -ulId ri- -t d. .-cr.rnin3. indi, dual acurinrirj, IL'-UnJ 1. hi'. ,:jl.e b. crEarlng unc:Er1.inI% ab,!ul nar I--i-. Th, h.1-i '. bC 3pp.: .lh i. n-I P. -rI, .3nl.3.xd In ur1ir Mi rAid, pr.3(i..3E ket -.(sa'' *n r, 1 53a~ AIIn4ii ur-lair Tr 3d.3 pr.3.:iic ha.3 Ent tr.se. ..- er.il p~.:.m.e.4ur, 1... * TtI, h~.~,.-.. ' be Iit~r'-p..r.3ni Trh. . thrh.n hai brr' r. 11h1! -1% A, rrm,n th, ai.3!' C'p.. it- rnart,,!; Ei i'ir-tn pl, nd In the l h er ir.s w'd inip. -rt- 1I3,. ;i,nt,.ni1sa ,I -4. -. ;a.rd int-,. -ii.J . :a~'. .3rJ cr :nlidurtiplni in'. e' ticl.n, .3nd ha- i1l[iDr&dct-m. J', r. r dii i.- ,l-r. ' 'd ..- Lr,.-u'hT oni *nt .3fl1'ub-di ss,-. Bui Th. re- enr e... 'r, ;h h . .- ,r .1 ih,t .- 1-sk n.: ir. - u i. -0- i air- rh.- 1.5p.rn.-, I-'. ,- ernmtnt ha.. L;.&d dii-- t-h it I,.. :.3rd r 1rn.w L - ' - 1t C. l5hat r.- ;- mi' -i pitnt nir.n;n,z,- n- T ..r pr-i- re -ri.n.M .3dih,ori%t , tc e ; ict imp-. t r.5. ,ilk.-J..I. r-i ino_-r.;;ti.r ih I- t--P4T kin- .:.r p .tC3 - .t l.si-rticr. :.-I.3rn. - .r-i.-r I, pr~ .2 e 1w h: r .trp..t oinueI prtd - n-i a..i.r- r..~. --. l.--.-pr;n-rkI- melir 'i,i L mr.- n rpr. 1.!' l,n . h r.- ,0 1..i nt1 1 13-i.s*,nuee lirm; hw.3-. hadl lh: H .r .~ anplt it!1 L-i ilIe 1.l rIICI ~-3IE nc4 - nl I'l II; .30.01-rab- a~r.,-- *p.rui I') d,,.elorI(ig.-mp.tt'. '.1 mdn, I h. Luar.-r-, an ~..mri., at'.. r-sI .r.!- .h..r i . r..,:tk *. i ~ sp.31p Ck 1.' .t . e * pr._-dn.lrre .30 ro . u~,d I.-,- Ire. ,.ni-S S- hO. J.. c ni I due ci un.-esri,irt . i..' tort.i,n rrc.dc.ercr; .p. i t r. rs unta,r ir.3d pr3.3 Yce 1.3- c --.. A in tL ur~ ie-I and r n-Ar a- -'LH 3 m3 1 -u 'rkci .i:c n i.api. On C lr e thE TI.. .nin'i. num r.- r -1rnr.iri.er.-rd Fpr.-.- .tr. b-. .dt,i~ri. er-. i3 i aId r.. ne.. i.. h... ha . cr, inipIlzment,:d k.r 1r 1'. r .i ,r-- .. h..-.tt. k L-r. pr--.i i- are the ''r'.: irdlicnnI .fl..;: n i 1.- hrw iJnl.~3l3n!. I- hicli i-rd. 1. I.- *:hi 1 -Ih r. thie 1'-1,ii i. -r. - -r, I* --t tral.- rene-di 3 - h id lp r Ce tirnC tr.-em t- rolzrs t',-- c r. r d m.I Ttn, iir.3,t. ,' .~,;. 1.-l.,,I - I~ r,rk-C LU Iu 'p- I r. k-.I. LIr.' ItI nI. .s- n'.- pl, Ilt .n 4 h. re,: .d. industrial countries after 1973, despite the need for bility, and slow growth. There is considerable disexpanded investment to adjust to changes in the agreement about the degree of disinflation needed world economy. Increased investment would have to reduce inflationary pressures at any point in implied more rapid structural transformation, time. But the effects of the disinflation actually which the advanced industrial economies found undertaken were not surprising. It is difficult to hard to undertake. Indeed, uncertainty about reduce inflation of the magnitude experienced in the future course of inflation discouraged long- the 1970s without experiencing some loss of outterm investment in favor of projects having shorter put and employment. pay-back periods. The latter offered greater liquid- The extent of the losses, however, depends on ity but were less effective for restructuring the several factors. One is the economny's flexibility in economy. the face of reduced demand. To the extent that labor contracts take time to renegotiate and wages Consequences of disinflation do not adjust quickly, reduced demand tends to produce unemployment. There is evidence that The disinflation of the early 1980s has its roots in over time the rate of rise of nominal prices, espethe events and policies of the previous decade. It cially of labor but also of some goods, has come to may be seen not only as a stage in the inflationary respond more slowly to recessions. This is not a cycle but also as a determined attempt by some recent phenomenon. It has merely become worse countries to break out of the vicious spiral of labor and more general over time, requiring greater market rigidities, inflation, macroeconomic insta- losses of output and employment for each percent- 19
Page 1: Public Disclosure Authorized Public
Page 4 and 5: Oxford University Press NEW YORK OX
Page 6 and 7: labor markets. And they have a vest
Page 8 and 9: 8 The policy agenda 155 Population
Page 10 and 11: Boxes 1.1 The arithmetic of populat
Page 12 and 13: Glossary Demographic terms informat
Page 14 and 15: I I
Page 16 and 17: countries regain their momentum of
Page 18 and 19: 4 Box 1.1 The arithmetic of populat
Page 20 and 21: example. Between 1955 and 1980 inco
Page 22 and 23: ment-all the more so if human skill
Page 24 and 25: etween 1 and 2 percent-moderate com
Page 26 and 27: FIGURE 2.1 directions-with a lag in
Page 28 and 29: 14 Distribution of product among se
Page 30 and 31: TABLE 2.2 Rates of growth in the re
Page 34 and 35: Box 2.2 Comparisons between the 193
Page 36 and 37: TABLE 2.6 indebtedness is denominat
Page 38 and 39: TABLE 2.7 Change in export prices a
Page 40 and 41: Burundi, Guinea, Mali, Malawi, and
Page 42 and 43: TABLE 2.9 Exports from developing c
Page 44 and 45: of rapid and painful adjustment for
Page 46 and 47: In many countries internal adjustme
Page 48 and 49: 3 Prospects for sustained growth Wi
Page 50 and 51: TABLE 3.2 Growth of GDP per capita,
Page 52 and 53: TABLE 3.4 Current account balance a
Page 54 and 55: over time. The main focus of indust
Page 56 and 57: TABLE 3.6 Growth of trade in develo
Page 58 and 59: Box 3.3 Delinking from the world ec
Page 60 and 61: nal surplus. The resulting rise in
Page 62 and 63: Because the public sector in low-in
Page 64 and 65: developing-country creditworthiness
Page 66 and 67: themselves and, by caring for young
Page 68 and 69: fertility in a changing world is a
Page 70 and 71: nize contraceptive services. As wil
Page 72 and 73: Economic transformation: Europe, Ja
Page 74 and 75: scious control of family size, prob
Page 76 and 77: Box 4.3 The European fertility tran
Page 78 and 79: FIGURE 4.2 Birth and death rates an
Page 80 and 81: Box 4.4 Alternative measures of fer
Page 82 and 83:
largest city in 1950, will not even
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FIGURE 4.4 Fertility in relation to
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government goal is a nationwide rat
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North America's population in 2000
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IBox 4.6 Three views of population
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TABLE 4.6 Population size and densi
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Box 5.1 Consequences of population
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implied by a simple division of tot
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and on farms. But the evidence on e
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get in GDP. Alternatively, all or p
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youths, who are presumably able to
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saving because they come from the c
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acre increased from 15.4 million to
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food they need. Although the amount
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is so scarce, they can do so only o
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from rural to urban areas mainly re
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other developing countries suggests
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emigration by providing information
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Box 5.7 Coping with rapid fertility
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6 Slowing population growth Experie
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feTtility; nor is it easy to judge
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the education of mothers increases
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etter education and health services
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TABLE 6.1 Total fertility rates and
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effectiveness of existing laws, ins
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in the 1950s and 1960s, fertility w
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FIGURE 6.6 Fertility dedine within
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Box 6.3 Mleasuring the value of chi
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few births; to encourage spacing, T
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Box 6.4 A deferred incentive scheme
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Box"7.1 Family planning for health
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FIGURE 71 88 in Romania (1979). Res
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132 Box 7.2 Birth planning technolo
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TABLE 7.2 Percentage of married wom
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TABLE 7.3 Discontinuation of contra
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may be delaying a first pregnancy,
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family planning and maternal and ch
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clients may develop can be promptly
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Box 7.6 The impact of service quali
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medical examination was not always
Page 162 and 163:
measuring social acceptability, or
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Box 7.7 Military versus social expe
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costs per user. Public cost per use
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sanguine, however, as soon as one t
Page 170 and 171:
TABLE 8.1 Population policy indicat
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Box 8.2 China's census: counting a
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FAMILY PLANNING. In many countries-
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improving the availability of famil
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Box 8.4 Africa: how much land, how
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Box 8.5 Infertility: a challenge to
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FIGURE 8.2 upper Egypt want no more
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growth. Fertility has declined in t
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Box 8.7 Changing policies and attit
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FIGURE 8.6 childbearing age have un
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able several types of condoms, pill
Page 192 and 193:
housing schemes to parents with onl
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and training, data collection and a
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9 Ten years of experience Much that
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ecause few effective methods are of
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Population data supplement The six
Page 202 and 203:
Table 4. Factors influencing fertil
Page 204 and 205:
190 Births and total fertility =Ice
Page 206 and 207:
Table 1. Population projections Rat
Page 208 and 209:
Table 2. Population composition Low
Page 210 and 211:
Table 3. Contraceptive use and unme
Page 212 and 213:
Table 5. Status of women Number enr
Page 214 and 215:
Table 6. Family planning policy _ _
Page 216 and 217:
Bibliographical note This Report ha
Page 218 and 219:
Background papers Note: Source refe
Page 220 and 221:
-1984. "The Malthusian Case: Preind
Page 222 and 223:
I I
Page 224 and 225:
Table 10. Structure of merchandise
Page 226 and 227:
Key In each table, economies are li
Page 228 and 229:
same order is used in all tables. T
Page 230 and 231:
Population I~~~~ - * S: ~ -- ' X -
Page 232 and 233:
Table 1. Basic indicators GNP per c
Page 234 and 235:
Table 2. Growthi of production Aver
Page 236 and 237:
Table 3. Structure of production GD
Page 238 and 239:
Table 4. Growth of consumption-and
Page 240 and 241:
Tadble 5. Structure of demand Distr
Page 242 and 243:
Table 6. Agriculture and food Value
Page 244 and 245:
Table 7. Industr Distribution of ma
Page 246 and 247:
Table 8. Commercial energy Energy c
Page 248 and 249:
Table 9. Growthi of merchandise tra
Page 250 and 251:
Page 252 and 253:
Page 254 and 255:
Table 12. Origin and destination of
Page 256 and 257:
Table 13. Origin and destination of
Page 258 and 259:
Table 14. Balance of payments and r
Page 260 and 261:
Table 15. Flow of public and public
Page 262 and 263:
Table 16. External public debt and
Page 264 and 265:
Table 17. Terms of public borrowing
Page 266 and 267:
Table 18. Official development assi
Page 268 and 269:
Table 19. Population growth and pro
Page 270 and 271:
Table 20. Demographic and fertility
Page 272 and 273:
Table 21. Labor force Percentage of
Page 274 and 275:
Table 22. Urbanization Urban popula
Page 276 and 277:
Table 23. Indicators related to lif
Page 278 and 279:
Table 24. Health-related indicators
Page 280 and 281:
Table 25. Education Number Number e
Page 282 and 283:
Table 26. Central goverrnment expen
Page 284 and 285:
Table 27. Central government curren
Page 286 and 287:
Table 28. In-come distribution Perc
Page 288 and 289:
Technical notes This edition of the
Page 290 and 291:
difficulties in assigning subsisten
Page 292 and 293:
series in national currencies are a
Page 294 and 295:
Public loans are external obligatio
Page 296 and 297:
estimates, the total fertility rate
Page 298 and 299:
expenditure and current revenue sho
Page 300:
Bibliography of data sources Nation
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World Development Report 1984

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