If you look at the African continent, perhaps the first word to come to mind is "enormous." And that's true. You could fit most of the United States, China, India,
If you look at the African continent, perhaps the first word to come to mind is "enormous." And that's true. You could fit most of the United States, China, India, and a lot of Europe, into Africa. But if you compare Africa to Europe, Europe has two to three times the length of coastline that Africa has.
But what does coastline length have to do with anything?
Well, coasts mean access to water.
As benign as water might seem, it’s a major driver of economic growth. Adam Smith, the father of modern economics, argued that access to water reduced the cost of trade, and gave merchants access to larger markets. These larger markets incentivized specialization and innovation.
These twin processes ultimately spurred trade activity, and consequently, economic growth.
As an end result, civilization tended to grow wherever trade was easiest.
If you want proof of this, think of a few major cities.
Look at Istanbul, New York, Venice, Hong Kong, London, and similar areas. What do they all have in common? They all sit near a major coast or a major river. In contrast, look at some of the poorest areas in the world—places like Kampala, or Pointe-Noire. These places are all landlocked. Since goods are easier to transport over water than over land, trade in landlocked areas is more expensive.
And what happens when trade is more expensive?
It becomes harder to spark economic growth.
What this all means is economic growth is not only affected by a country’s rules and institutions, but by a country’s natural blessings, or natural hindrances, too. The effects of geography on growth cannot be discounted.
Contributed Content (0)
Ask a Question
Fascinating and really informative videos. But is there nothing to say about Africa's striking resources in some of its poorest nations? Some reference to institutions and post-colonial (i.e. capitalist kleptocratic) controls over political and military systems seems necessary. Do you have some good links about these questions?
Africa has natural resources but the problem is that to use them you need institutions and also a tolerable geography. Institutions are poor and the continent has special viral threats. For viral threats, there is no one to blame. The question is who is to blame for the poor institutions. Africa was decolonized 50 to 70 years ago. It is true that colonization left some extractive institutions in place (we know what Leopold II of Belgium did in Congo for example), and there is institutional path dependency. Since then, the international community tried to help, but they tried to help in the wrong way. Elizabeth Schmidt is a good reference on how military foreign interventions failed in their attempt to stabilize African conflicts. Another way in which they tried to help was government to government aid. William Easterly, using Peter Bauer's principles, explains why that does not work.