ABSTRACT
This chapter uses a political economy model to study birth rates in China and compare them to those in India. The model identifies government capacity as a crucial factor that shapes people’s decision regarding the number of children they will have. As population growth and economic growth are interrelated, a government can use the political process to achieve its economic objectives. The implications of the model are tested against China’s and India’s data for the period 1960-95. The result shows that the birth rates in both countries confirm the theoretical conclusion. The major policy implication is that in order to sustain its economic development, China and other populous developing countries must urbanize the countryside demographically, economically and politically to produce a set of conditions that favor long-term growth.
