Economic Growth 15 - Geography, Climate, and Natural Resources Flashcards
That some parts of the world have low population densities is no surprise. It is difficult to live at all—let alone to produce output—in some of the earth’s inhospitable regions. Where do most people chose to live?
Most people live in places where conditions are favorable for production and for living: where temperatures are moderate, the ground is level, soil is fertile, and there is neither too much nor too little precipitation.
Recall that one of the determinants of openness to trade is geography. Unlike other determinants of trade, such as tariffs and quotas, a country’s geography is unchangeable. What is the implication of this?
If geography determines trade, and if trade helps a country grow rich, then some countries (or regions of countries) have a fundamental advantage over others.
What is the most important geographic determinant of a country’s ability to participate in international trade?
Its proximity to the ocean. As in Smith’s day, today ocean transport is the cheapest way to ship goods. And geographic evidence bears out the importance of ocean transport in determining where people live and what standard of living they enjoy.
Besides access to waterways, what is another determinant of a country’s openness to trade?
Its location with respect to major centers of economic activity.
On average, how does each 600 miles (1,000 kilometers) of distance from one of the most developed regions of the world (the United States, Western Europe, or Japan) affect transport costs? by one
On average, each 1,000 kilometers of distance from one of the most developed regions of the world (the United States, Western Europe, or Japan) increases transport costs by one percentage point. Similarly, increasing the distance between two countries by 1% lowers the volume of trade between them (relative to GDP) by 0.85%.
What helps account for the cost of transporting goods?
Access to the sea together with the distance from major centers of economic activity.
Other than differences in income between countries, what else does access to trade explain?
Access to trade explains differences in income not only among countries but also among the regions of a single country.
The most dramatic impact of this clash of civilizations occurred in the Americas and in Australia, where much of the native culture, language, and population were wiped out and replaced with European imports. Most of Asia, by contrast, either was never colonized by Europeans at all or, if colonized, managed to maintain its precolonial civilization, population, and language. Sub-Saharan Africa’s fate lay between these two extremes: European control was more complete than in Asia, but it never resulted in the wholesale displacement of the native population, as it had in the Americas. Many of the proximate causes of Europe’s domination are fairly obvious. Explain.
Europeans of the 16th century had better weaponry and more sophisticated social organizations than did the American, Australian, and African natives with whom they came into contact. The considerably smaller technological gap between Europeans and Asians explains why Europeans failed to dominate Asia as they did other regions.
Why had the Americas, Australia, and sub-Saharan Africa not developed to the same level as the civilizations of Europe and Asia by the time that they all came into close contact?
In Guns, Germs, and Steel: The Fates of Human Societies, biologist Jared Diamond argues that it was geography that determined this outcome.* According to Diamond, Eurasia, the land-mass composed of the continents of Europe and Asia, had several key advantages over the rest of the world that allowed it eventually to dominate.
According to Jared Diamond in Guns, Germs and Steel: The Fates of Human Societies, what is the first advantage over the rest of the world allowed Eurasia eventually to dominate.
Eurasia’s most important advantage was its good fortune in having numerous species of plants and animals that could be domesticated. The large mammals that formed the basis for pre-modern agricultural economies—cows, horses, pigs, sheep, and goats—were all native to Eurasia. By contrast, in the Americas, the only mammals that could be domesticated were llamas and alpacas, both of which were localized in their habitats and of limited economic usefulness. Similarly, most of the large-seeded grass species that could potentially be domesticated as food grain were native to Eurasia.
This advantage in the range of species that could be domesticated in Eurasia stemmed partially from plain luck. It also resulted from a second advantage that Eurasia had: its size. Including North Africa, to which it was both culturally and economically linked, How big is the Eurasian continent relative to the rest of the world?
Including North Africa, the Eurasian landmass is 50% larger than the Americas, two-and-a-half times as large as sub-Saharan Africa, and eight times as large as Australia.
Why was a large landmass conducive to Eurasia’s world domination?
A larger area is likely to contain more useful plant and animal species. If the employment of these species then spreads throughout the landmass, residents of a larger area ultimately have the benefit of a higher number of useful species.
Explain why another advantage of Eurasia was in its geographic orientation along an east-west axis.
This orientation allowed for the spread of agricultural techniques and of useful plant and animal species throughout a zone of relatively similar climates. Thus, the chicken, domesticated in China, could spread to Europe, whereas grains first domesticated in the Fertile Crescent of southwest Asia spread as far east as Japan.
Explain why other regions (than Eurasia) were disadvantaged by their geographic orientation along an north-south axis.
By contrast, the north-south orientation of the Americas meant that climactically similar zones, which could potentially have shared agricultural technologies, were separated by areas in which these technologies would not be useful and thus would not spread. Similarly, although the climates of southern Africa and the Mediterranean basin were similar enough that European crops would have grown in southern Africa, the two regions were separated by a whole continent in which European crops would not flourish. Consequently, these crops did not reach southern Africa until they arrived by sea.
What did the availability of food crops and domestic animals in Europe and Asia allow for?
The availability of food crops and domestic animals in Europe and Asia allowed for more efficient food production, denser populations, and the rise of advanced civilizations. Surplus food could support a large class of rulers, priests, and warriors.
What is it that the context of having more efficient food production, denser populations, and the rise of advanced civilizations fostered?
This context fostered the rise of new technologies, including writing, metallurgy, and the oceangoing ships that took European colonizers around the world.
How did the east-west orientation of Eurasia lead to its economical advance/dense population?
The east-west orientation of the Eurasian landmass allowed important inventions such as the wheel (invented around 3000 b.c. in the Black Sea region) to spread throughout the continent. And the vastness of the Eurasian landmass permitted a large population to share these new technologies. As a result, Eurasia was more economically advanced—and more densely populated—than any other part of the earth.
Finally, domestic animals and dense populations gave Europeans one more crucial benefit. People’s close association with large animals allowed many animal diseases, such as measles and smallpox, to transfer to humans. How in the world is this beneficial?
Dense populations caused Europe to sustain a number of endemic diseases that, in a sparser population, would have died out. Over time, Europeans developed partial immunity to these diseases, although they still harbored the agents of infection.
How did European disease, in a sense, benefit them when they were conquering the world?
Over time, Europeans developed partial immunity to these diseases, although they still harbored the agents of infection. When Europeans came into contact with unexposed American Indians, the results were devastating. Diseases killed far more Americans than any deliberate action of the Europeans, and the massive depopulation left the Americas (and later Australia as well) open to domination and colonization.
A look at the world map inside the front cover of this book suggests that wealthy countries tend to be near one another. Europe is the best example. Among non- European countries that are wealthy, there is also a good deal of clustering, such as Canada and the United States, Japan and South Korea, and Australia and New Zealand. What is the first aspect of the first possible explanation for this clustering?
One possible explanation for this clustering is that it reflects countries’ influence on their neighbors. Economists use the term spillovers to describe these cross-border effects. We already saw that countries that are near each other are more likely to trade with each other. Wealthy countries also tend to spread jobs to their poor neighbors to take advantage of low wages.
A look at the world map inside the front cover of this book suggests that wealthy countries tend to be near one another. Europe is the best example. Among non- European countries that are wealthy, there is also a good deal of clustering, such as Canada and the United States, Japan and South Korea, and Australia and New Zealand. What is the second aspect of the first possible explanation for this clustering?
A wealthy neighbor also provides a positive example, a source for ideas to copy, and opportunities for training. In contrast, a politically unstable neighbor is likely to be a source of refugees or military aggression. Because poor countries are more prone to suffer from such instability, having rich neighbors is an aid to a country’s growth.
A look at the world map inside the front cover of this book suggests that wealthy countries tend to be near one another. Europe is the best example. Among non- European countries that are wealthy, there is also a good deal of clustering, such as Canada and the United States, Japan and South Korea, and Australia and New Zealand. What is the second possible explanation for this clustering?
A second possible explanation for this clustering is that nearby countries share common characteristics that are important for growth. For example, countries that are close to each other share the same climate. Similarly, neighboring countries may have common characteristics that are difficult for economists to measure.
Depending on the exact source of the relationship between a country’s income and that of its neighbors, the fact that wealthy countries are geographically clustered may represent an additional obstacle for the development of many poor countries. How so?
Specifically, if the clustering of economic growth is indeed the result of spillover effects, then this is good news for a few developing countries that are near richer countries (e.g., Mexico, Morocco, and China), but it is bad news for most of the developing world, particularly for sub-Saharan Africa.
If, however, the clustering of economic growth simply reflects common factors among neighboring countries, then the clustering itself does not represent additional bad news. How so?
According to this second interpretation, countries that put in place the building blocks of growth—good government, accumulation of physical capital and human capital, and so on—will grow rich even if their neighbors remain poor.
Another way in which geography has been theorized to affect economic growth is through its effects on the size of states as well as the conduct of government. What is the background to this theory based on?
The observation of differences in the historical formation of states in Europe in comparison to most of the rest of the world— and, in particular, in comparison to China—in the period before the Industrial Revolution.
Was Europe’s lack of unification good for economic growth? A priori, we might expect exactly the opposite. Explain our initial gut intuition.
A large, unified country will have a large market and thus the potential for gains from specialization. Productive ideas should also spread more easily in a unified country. Disunity raises the prospect of war between neighboring states, which wastes resources—and indeed, preindustrial Europe experienced a great deal of fighting among neighboring states.
Despite these theoretical advantages of unification, historical experience points to a number of ways in which the lack of centralization in Europe proved advantageous for economic growth.
What’s the first?
External competition served as a check on governments’ power. Although a given ruler might be tempted to enact policies that would stifle economic innovation to maintain the status quo, there was always the danger that neighboring countries would allow innovation and thus gain an advantage.
What explains the difference in extravagance in government in Europe and China?
Government’s size was limited by the ability of capital owners to move their wealth—and of workers to move themselves—from one jurisdiction to another if they found taxes or other restrictions too burdensome. These constraints forced Europe’s monarchs to be less prone to wasteful extravagance than their Chinese peers.
Despite these theoretical advantages of unification, historical experience points to a number of ways in which the lack of centralization in Europe proved advantageous for economic growth.
What’s the second?
When governments did try to suppress destabilizing economic innovation (or the destabilizing ideas that went along with it), the innovators often could move to a neighboring country. In China, by contrast, there was usually no outside competition for the government to worry about, nor was there any place for suppressed innovators to go.
The danger of the unified government in China was most forcefully demonstrated in the 15th century, when the imperial court turned violently against oceanic exploration. The huge Chinese fleets, which had sailed as far as the east coast of Africa, fell into disrepair. By 1500, building a ship with more than two masts had become a crime punishable by death. The advantage of European fragmentation was demonstrated in a similar area:
When Genoese navigator Christopher Columbus was unable to get financing for his voyage of exploration from the Portuguese, he turned to their neighbors, and competitors, the Spanish.
One prominent theory attributes Europe’s fragmented political structure to geography for two reasons. What’s the first?
Europe’s most fertile lands—areas including the London basin, the Ile de France, and the plain of the Po River, which would become the cores of modern states—are widely dispersed among large areas of reduced fertility.
One prominent theory attributes Europe’s fragmented political structure to geography for two reasons. What’s the second?
Europe is also cut apart by numerous natural barriers, including mountain chains such as the Alps and the Pyrenees, as well as bodies of water such as the English Channel. Although the different parts of the continent can communicate and trade with one another, they are sufficiently separated that they are difficult to govern as a single unit.
How does the geography of Europe differ from that of China for our purposes here?
China has only four such core regions, of which two, centered along the Yellow and Yangtze rivers, are dominant.6 Further, the main core areas of China were connected by the Grand Canal in the fourth century b.c. Thus, geography made it likely that China would be governed as a single unit, a circumstance that held back economic growth.
Like many other explanations for the different historical experiences of Europe and China, however, this theory has to be treated with some caution. What is an interesting counterexample?
From the history of the Indian subcontinent, which has a geography much like Europe’s with scattered areas of fertile land separated by desert, hills, and jungle. India was not politically unified between the Gupta empire in the fifth century a.d. and the Mughals in the 16th century a.d. Yet political fragmentation in India did not have the same growth-inducing effects that it did in Europe.
What is the takeaway from the India counterexample to geography determining the relative success of Europe over China?
This example is a useful reminder that geography is not necessarily destiny—geography may be part of the explanation of why Europe developed before the rest of the Eurasian continent, but not all of it.
What is one of the most important aspects of a country’s geography?
Its climate—that is, the seasonal patterns of temperature, precipitation, winds, and cloud cover.
Previously in this chapter, we noted the strong relationship between a country’s distance from the equator (i.e., its latitude) and its income per capita. Because latitude is linked to climate, this finding suggests a role for climate in determining income per capita. What is wrong with this line of thinking however?
Climate does not depend on latitude alone; factors such as prevailing weather systems, distance from the ocean, and altitude also matter.
How does climate directly influence productivity? (3)
- Influences on agriculture.
- Influences on the human input into production. -By making a location more or less pleasant as a place to live.
How does climate influence the human input into production?
Because the prevalence of disease is linked to climate and because people’s ability to work is affected by temperature.
The finding that agricultural output per worker is low in the tropics does not necessarily mean that the tropics are a bad place for agriculture. That is, this fact alone does not indicate whether low agricultural output in tropical countries is the result of inherent differences in the agricultural environment, such as can be traced to climate, or whether there is some other cause. What other factors might explain the gap in agricultural output between tropical and temperate countries?
- Differences in the use of inputs to production such as agricultural machinery and fertilizers, the human capital of farmers, and the amount of land available per farmer.
- Differences in agricultural productivity might result from differences in the institutional environment, such as the quality of government, between tropical and nontropical countries.
At first, the finding that tropical climates are inhospitable to agriculture may be surprising because we tend to associate tropical climates with lush vegetation. Tropical areas also have longer growing seasons than do temperate regions. On closer inspection, however, tropical climates suffer from several disadvantages in producing useful crops. What are some?
Although the tropics do receive heavy rainfall, the pattern in which rain falls is not good for farming. Similarly, the seasonal pattern of sunlight in the temperate zones—long days in the summer and short days in the winter, as opposed to the relative constancy of sunlight in the tropics—is optimal for growing staple grains such as wheat and corn (maize).
