How Persistent is Prosperity? (Optional)
There has been so much interest in the Jared Diamond video that we thought we would update that discussion with some new material. Since the publication of Diamond'
There has been so much interest in the Jared Diamond video that we thought we would update that discussion with some new material. Since the publication of Diamond's book, what else have we learned about the relationship between geography and development? To what extent is the current prosperity of a nation the heritage of a more distant past? How much is prosperity determined by the distant past? These fascinating questions still await further investigation, but here is the scoop on where the frontier is at right now.
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If geography explains ~50% of prosperity does that means that any country could have at least 50% of USA GDP per capita PPP? That's a value of some western european countries; therefore, if the answer to the question is a yes, doesn´t that implies that (~100% of) the world's income problems are due to 'institutions'?
In other words, you are arguing that no country is so poorly off in geography that it can't obtain a reasonable standard of living if it had good institutions. I think that's a reasonable guess although I would put it on the optimistic side. Disease burden, being land locked etc. are not just factors that knock off a fraction of a country's GDP per capita but factors that make it hard to accumulate GDP per capita, i.e. that reduce growth rates. In addition, people often can't leave the place they are born so all these factors combined can have a significant effect on long run outcomes. Thus, I am not quite as optimistic as you but I would agree that any poor country can do significantly better with better institutions.
Since all economic development starts with ideas is there any research looking at the correlation between:
1. the degree to which different languages can express abstract thought
2. the presence of a sophisticated written language
and historical economic development? My understanding is that in several indigenous North American languages there was no word for triangle -making the development of geometry or trig rather difficult. Nor was it possible to state something like' your nose is on your elbow' because it is not.
Is there any explanation offered for why the "old" geography of settlers influences them more in their new location than the geography of the new location? That seems entirely counterintuitive.
I would guess that once some knowledge has been gained by a people they will find it easier to apply that to somewhere new than other people would find it to start from scratch. For example if they have learned basic agricultural techniques they will try to apply or adapt them to their new environment.
Going further I would imagine that more complicated ideas such as the development of institutions will give people a big leg up, so for example when settlers arrived in the new world they understood not only agricultural techniques but also how to build, how to organise towns, how to store food, how to read and write, etc, which was a big advantage that was not dependent upon the local geography.
When you mentioned the relative importance of geography and biology to economic development you did not mention the relation between the two. Is absolute latitude important because that is where the domesticated animals originated or are most easily raised? Is the topography of an area important because larger fields are more easily tilled by yoked animals than mountainous land or is the protection offered by the land enough to allow more time to think of ways to improve life rather than providing for defense. This area of study is fascinating and I assume the upcoming lessons will get into these questions.
Sorry to keep harking back to Why Nations Fail, but it crystallizes many of my dissatisfactions with the explanations you consider. In fact it challenges the papers you cite, and comes from a Bates medal winner, a laureate of the main prize for an economist under 40. So the fundamental economic analysis is likely to be well-grounded if not well-founded. I think it would be fairer to say geography is associated with the current state of development, rather than explains it. Not a minor distinction. As WNF points out, most of the places now developed were well behind the less temperate regions in the 16the century, whether central America, India, or China. I remember Andre Gunnar Frank's Reorient suggesting that Europe only developed into modernism when it took gold from the Western Hemisphere to meet the demand in India and China, getting in return the spices, goods and preservatives it needed to raise living standards. Gunnar Myrdal, of course, observed that current rates of productivity in temperate vs tropical regions (not a historical argument) could be allied to the prevalence of debilitating diseases in the tropics. WNT has a good section on how, despite the inability of Europeans to establish themselves in West African states such as Sierra Leone, they were still able to exploit the situation. Do you have some figures on the differences in productivity between the 1940s and now in tropical regions, in view of the advances in medicine (though resistant malaria recently might skew the latest results)?
I'm adding this query because of the practice questions. Can you point us to some good sources on the explanations for varying levels of technological adoption. Why Nations Fail is, thank goodness, not prescriptive on this issue and goes into some detail on why some countries adopt technological developments and others resist it. The answers, it seems, depends on how defensive oligarchies and special interests feel, and how much power they have to prevent adoption of technologies.