6 - Geography, Institutions, Clime, Genetics & Development

Question 1

3 Traditional versions of geography

Answer 1

1) Determines work effort/incentives/productivity

2) Determines available technology, e.g in agriculture
- soil, vegetation, animals, physical assets

3) Disease burden

Question 2

Role of geography:

Answer 2

• Nearly all countries in the tropics are poor

- Coastal economies generally higher income than landlocked countries

Question 3

GDP per capita * population density = GDP density

Answer 3

US/ Western Europe/ East Asia: globally 3% of land, 13% of pop., 32% of world GDP

Question 4

Geography mechanisms

Answer 4

Population densities arise where agriculture possible

Question 5

Basic idea - climate affects economic performance

Answer 5

• effects of temperature, precipitation, and natural disaster

Question 6

Nordhaus (2006) :

Answer 6

20% of income difference between Africa and rich countries explained by geography

Question 7

Dell et al (2009)

Answer 7

2000, countries on avg. 8.5% poorer per cap. per 1* warmer

Question 8

Easterly and Levine 1997

Answer 8

Per capita GDP growth inversely related to ethnolinguistic fractionalization

Question 9

The Serial Founder Effect:

Answer 9

• lower genetic diversity among indigenous populations at greater migratory distances from East Africa

Question 10

Role of Genetics

Answer 10

Original population - 3 alleles
Founder population - 2 alleles
Sub-founder population - 1 allele each

Question 11

Expected Heterozygosity Index of Genetic Diversity

Answer 11

The probability that two individuals, selected at random from a given population, are genetically different from one another (in a certain spectrum of genes)

Question 12

Human Genome Diversity Project (HGDP)

Answer 12

Designed to study GD in isolated populations in order to shed light on:

• the scope of human diversity
• the journey of humankind from Africa

Question 13

Genetic diversity increases the incidence of:

Answer 13

• mistrust

- civil conflicts

Question 14

North and Thomas 1973

Answer 14

fundamental explanation of comparative growth = institutions

Question 15

Economic institutions matter for growth since they shape the incentives of key comic actors

Answer 15

• investments, human capital, tech
• geography/ culture
• institutions major source of cross-country growth and prosperity

Question 16

Economic institutions are endogenous

Answer 16

Since determined by choices of society, which in part arise as economic consequences of institutions

Question 17

Distribution of political power in society also endogenous:

Answer 17

De jure (institutional) power - originating from political institutions

De factor political power

Question 18

Political institutions (though slow changing) are also endogenous

Answer 18

Leads to persistence

Question 19

Two sources of persistence

Answer 19

1) Political institutions are durable

2) group much richer

Question 20

Technological and environmental shocks can upset:

Answer 20

balance of de facto political power –> political institutions –> economic institutions

Question 21

Historical example of changes in land market and atlantic trade during 16th and 17th centuries

Answer 21

• Increased econ fortunes of landowners and traders
• Gentry and merchants desired to change property rights
• Raised large army, overthrew stuart monarchy
• Resulted in change to political institutions

Question 22

Good economic institutions

Answer 22

those that provide security of property rights and relatively equal access to economic resources to a broad cross-section of society

Question 23

Implications of good economic institutions

Answer 23

1) more likely to arise when political power in hands of relatively broad group with significant investment opportunities
2) institutions more likely to arise and persist when only limited rents that power holders can extract from rest of society

Question 24

Better econ. institutions –>

Answer 24

higher average incomes

Question 25

Korea split 1948, North korea:

Answer 25

society socialism, economy directed by govt. as opposed to markets

Question 26

south korea:

Answer 26

maintained system of private property, attempted to use markets and private incentives to develop economy

Question 27

Institutional reversal + institutional hypothesis

Answer 27

Predicts reversal of fortune

Relatively rich places received poor institutions and thus poor economic outcomes

Question 28

Europeans likely to create self-serving institutions

Answer 28

• extractive institutions: where resources available, typically small group europeans + large indigenous pop.
• property rights institutions: few resources and few people, more heavily settled by europeans

Question 29

Whether europeans could settle or not determined by

Answer 29

• disease environment

- historical disease environment is exogenous source of variation for institutions today

Question 30

Acemoglu et al 2001 argues that:

Answer 30

once control for institutions, geography and culture have no effect on growth

explains why strong correlations between geographic variables and income per capita