Rates of Growth, Limits to Growth and Sustainable Development

Abstract

This paper begins with an evaluation of the role of different institutions and different starting points on rates of economic growth. This is followed by a critique of the claim, made by pessimists at least since Tertullian, that various factors – population, affluence, technology – impose a limit on growth; evidence is presented that in many cases, increasing population, new technologies and even affluence reinforce the conditions for growth and prosperity to continue. Finally, some real problems are considered: (1) over-­abstraction of water and (2) pollution are re-­conceptualized as institutional problems best addressed through effective allocation of property rights and suitable liability rules.