The causal relationship between population growth and economic development: A case for Uganda (1983 -2023)

Abstract

This study investigates the short-run and long-run effect of population growth on economic development in Uganda over the period 1983–2023. Employing annual secondary time-series data from the World Bank’s World Development Indicators, the analysis applies the Autoregressive Distributed Lag (ARDL) model, complemented with structural break testing, to capture both immediate and equilibrium effects. Unlike earlier studies, this research integrates variables such as agriculture, gross fixed capital formation, and industry into the growth model, providing a more comprehensive sectoral lens. Theoretically, the study situates Uganda’s demographic dynamics within the Solow growth model, offering empirical evidence on whether rapid demographic expansion dilutes capital accumulation or can generate a demographic dividend. The results indicate that rapid population expansion exerts a significant negative effect on economic development in the long run, while gains in agriculture, investment, and industry mitigate this effect with positive gains. In the short run, agricultural growth has a statistically significant positive impact on economic development. An error‐correction coefficient of –0.511 (p < 0.001) signals that over half of any disequilibrium is corrected within a year, confirming a stable long‑run relationship. To harness Uganda’s demographic transition, the study recommends strengthening family‑planning and education programs, modernizing agriculture, and scaling up productive investment in infrastructure and manufacturing. Keywords: Population Growth; Economic Development; ARDL; Uganda