Ecological Economics 35 2000 271 287 www elsevier com locate ecolecon ANALYSIS Easter Island historical anecdote or warning for the future Rafael Reuveny a Christopher S Decker b 1 a School of Public and En6ironmental Affairs Suite 430 Indiana Uni6ersity Bloomington IN 47405 USA b Kelley School of Business Suite 451 Indiana Uni6ersity Bloomington IN 47405 USA Received 5 October 1999 received in revised form 11 April 2000 accepted 16 May 2000 Abstract Two standard solutions for the Malthusian Trap involve institutional reforms and technological progress Using Easter Island as an example we investigate the hypothetical role that technological progress and population management reform might have played in preventing the collapse of the island s civilization The model includes a composite manufactured good and a composite harvested renewable resource Fertility is assumed to rise with per capita income The resource s carrying capacity and intrinsic growth rate as well as labor s harvesting productivity are subject to technological progress Fertility is subject to population management reform The model yields a system of two simultaneous nonlinear non autonomous differential equations We first study the system s steady states The system is then parameterized for Easter Island and its comparative dynamics are investigated in simulations We find that technological progress can generate large fluctuations in population renewable resources and per capita utility sometimes resulting in system collapse With high fertility rates the population and the resource vanish None of the simulations investigated here exhibit a constantly growing per capita utility over time Finally we evaluate the applicability of these results to contemporary societies 2000 Elsevier Science B V All rights reserved 1 Introduction Concerns regarding the Earth s population explosion and the pressure it places on natural resources have rekindled interest in the sustainability of economic prosperity an issue that seems Corresponding author Tel 1 812 8554944 fax 1812 8557802 E mail addresses rreuveny indiana edu R Reuveny chrdecke indiana edu C S Decker 1 Tel 1 812 8559219 fax 1 812 8553345 particularly relevant as we enter a new millennium Brown and Flavin 1999 explain the key limits as we approach the twenty first century are fresh water forests rangelands oceanic fisheries biological diversity and the global atmosphere They go on to ask Will we recognize the world s natural limits and adjust our economies accordingly or will we proceed to expand our ecological footprint until it is too late to turn back These concerns can be traced back to the work of Malthus 1798 who argued that population growth would eventually lead to natural resource 0921 8009 00 see front matter 2000 Elsevier Science B V All rights reserved PII S 0 9 2 1 8 0 0 9 0 0 0 0 2 0 2 0 272 R Reu6eny C S Decker Ecological Economics 35 2000 271 287 depletion economic decline starvation violent conflict and population decline 2 Many scholars believe that the decline of Easter Island exemplifies Malthus s predictions Weiskel 1989 Ponting 1991 Keegan 1993 Brown and Flavin 1999 The case of Easter Island stands at the center of our paper A thousand years ago a civilization thrived there by the time Europeans arrived in 1722 it had essentially disappeared and no one really knows why While scholars have puzzled over this for years offering many interesting theories it was not until recently that formal economic modeling was applied to the subject Brander and Taylor 1998 attempted to solve the mystery by modeling the island s economy as a predator prey system of renewable resource use in which the human population dependent on the island s resources for survival overexploited them This ultimately resulted in a dramatic population decline a characteristic of the so called Malthusian Trap Brander and Taylor assumed that island s resources and institutional structure were not subject to change or reform over time We build on their work by relaxing these two restrictions We then address the relevance of our work to modern countries particularly less developed countries LDCs Two solutions to the Malthusian Trap are typically suggested in the literature on sustainable development 3 The first solution involves institutional reforms In this view overexploitation of natural resources results from ill defined property rights Assigning private ownership to a resource will limit its extraction Another kind of institutional reform involves population management efforts to reduce birth rates The second solution to the Malthusian Trap is technological progress Natural resource depletion need not be a 2 The work of Malthus while acknowledged has been eclipsed by Adam Smith and David Ricardo John Maynard Keynes sought to correct this neglect If only Malthus instead of Ricardo had been the parent stem from which nineteenth century economics proceeded what a much wiser and richer place the world would be today Keynes 1933 120 Interest in the work of Malthus grew following the work of Meadows et al 1972 3 For reviews of this literature see Perman et al 1996 Toman et al 1995 concern if technological progress improves resource yields carrying capacity and harvesting efficiency In a sense technology can provide substitute for natural resource depletion Solow 1997 Stiglitz 1997 However this approach is not without critics In particular Georgescu Roegen 1971 Daly 1997 argued that capital and technology ultimately cannot provide substitute for natural resources Standard economic growth models emphasize the role of technological progress in securing perpetual growth Armed with technology population issues became tertiary to the analysis Consequently in these models population growth is determined exogenously and typically is assumed either to be constant or to grow exponentially Recently dynamic models featuring endogenous population growth have appeared The studies by Prskawetz et al 1994 Milik and Prskawetz 1996 Brander and Taylor 1998 are particularly relevant to our paper In the first two studies a natural resource harvested under open access is combined with labor to produce a final good but the consumption side is not modeled In the Brander and Taylor study a consumption side is added to a similar but simplified analytical framework All of these studies yield a similar system of differential equations which is then parameterized and simulated The goal of Prskawetz et al and Milik and