Geography, Institutions, Climate, Genetics and Development Flashcards
(19 cards)
Fundamental Roots of Growth
Neoclassical/traditional models explain mechanics, but not the roots
Geography: 3 (traditional) versions
- Determines work/effort/productivity (questionable)
- determines availability of tech (soil, land, animals, vegetation, physical assets
- Disease Burden
Geography: Relationships
Coastal economies: generally (+) income than
landlocked -> Outside Europe no high-income landlocked country
No relationship pop. density and income
* Eurasian land mass most densely populated
GDP per capita * population density = GDP density
Geography: Mechanisms
Mechanisms:
* Disease burden
* Limitations on agricultural productivity
* Access to sea limiting trade, migration, investment.
* Pop. density good for coastal areas (+ing returns?), but not in hinterlands.
* Population densities arise where agriculture possible
BUT as such have done so in countries least equipped
to experience rapid economic growth.
Geography: Modern Lit
Basic idea: climate affects economic performance
* Effects of temperature, precipitation and natural disasters
* E.g. agr. Output, ec. Growth, health and conflict
Key is idea that spatial variation largely fixed !!!!!
* So exploit ‘within’ variation using panel data
* Exogenous variation since weather effectively random
Nordhaus (2006)
* Finds 20% of income differences Africa and rich countries
explained by geography (temp./precipitation/soil/distance
from coast)
Dell et al (2009)
* 2000, countries on avg 8.5% poorer per cap. per 1° warmer
Culture: Ethnolinguistic Fractionalisation
Easterly and Levine (1997)
* Per capita GDP growth inversely related to
ethnolinguistic fractionalisation
* Why? Ethnic conflict / former colonies’ borders
Mauro (1995)
* Links ethnic fragmentation and quality of institutions
Alesina et al (2002)
* 3 measures based on language, ethnicity and religion
* Examine effects on quality of institutions and growth
* Correlations only
Culture: Out of Africa Hypothesis
Galor: Human Genetic Diversity & Comparative Ec. Dev.
* Exodus of Homo sapiens out of Africa
* (70,000-90,000 BP)
* Variation in migratory distance affected genetic diversity, And in turn comparative economic development
* Accounts for 16% of the variation in the income per capita
across countries
Genetics: Genetic Diversity
Lower genetic diversity among indigenous populations
at greater migratory distances from East Africa
-> further away from Africa, less genetically diverse indigenous populations
-> Departing populations only carry a subset of the
genetic diversity of their parental colonies
-> Existence of an optimal level of genetic diversity (for
each stage of development).
Balances between:
* The negative effect on the cohesiveness of society
* The positive effect on innovations
➕ Pros (Strengths of the Theory):
1. Explains cross-country variation in income and growth using deep-rooted, exogenous factors.
2. Empirical backing: Galor and co-authors find statistical support using global data.
3. Accounts for both cohesion and innovation, which are central to development.
4. Helps bridge genetics and economics — interdisciplinary insight.
➖ Cons (Critiques / Limitations):
1. Risk of determinism: Suggests destiny is tied to genes, which can oversimplify complex historical and political processes.
2. Hard to measure: Optimal level differs across time and development stage — difficult to quantify precisely.
3. Causality concerns: Correlation doesn’t always mean causation (e.g., reverse causality or omitted variables).
Ethical sensitivity: Discussions about genetic diversity can raise controversial or misunderstood implications.
Genetics: HGDP
Expected Heterozygosity Index of Genetic Diversity:
-> prob 2 individuals, selected at randomf rom a given population, are genetically different from one another (spectrum of genes)
Human Genome Diversity Project (HGDP)
* Designed to study GD in isolated populations in order to
shed light on:
* The scope of human diversity
* The journey of humankind from Africa
* Consists of 53 ethnic groups (52 originally)
* Isolated geographically
* Resided in the same location for a prolonged period of
time
Genetics: Effects of Genetic Diversity
Genetic diversity increases the incidence of:
-> mistrust/civil conflict/inefficiency of operation compared to PPF
(+)ve, but diminishing effects of
-> genetic diversity on innovations
-> homogeneity on cohesiveness
-> A hump-shaped relationship between diversity and
development
-> Optimal level of genetic diversity (for each stage of
development) - concerning
Institutions
North and Thomas (1973): fundamental explanation
of comparative growth = institutions
North (1990): “Institutions are the rules of the game
in a society or, more formally, are the humanly
devised constraints that shape human interaction”
“In consequence they structure incentives in human
exchange, whether political, social, or economic”
-> …to innovate, take risks, save, introduce more efficient
techniques, learn, educate, provide public goods…
Institutions: Argument 1
Shaping incentives for economic indicators
- Economic Institutions matter for growth since they
shape the incentives of key economic actors
– Investments physical/human
capital/tech./organisation of production
– Geography/culture may matter for ec. Performance
– BUT differences in ec. Institutions major source of
cross-country growth and prosperity
𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐈𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧𝐬 𝐭 →
{𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞
𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧 𝐨𝐟 𝐫𝐞𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐭+𝟏)
Ec. Institutions therefore determine both size and
distribution of economic pie
Institutions: Argument 2
Institutions are Endogenous
Economic Institutions are endogenous, since determined by choices of society, which in part arise as economic consequences of institutions.
Typically result in conflict of interest between groups in
society – wrt choice of economic institutions.
Who will prevail? Depends on political power of two
groups
𝐏𝐨𝐥𝐢𝐭𝐢𝐜𝐚𝐥 𝐏𝐨𝐰𝐞𝐫 t →𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐈𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧 t
Institutions: Argument 2
Distributions of Political Power are Endogenous
- Distribution of political power in society also
endogenous. Distinguish between:
De jure (institutional) power
-> Originating from political institutions
-> Determine incentives/constraints on individuals in
political sphere
De facto political power
-> power exercised in practice, even if not formally or legally recognized, often by groups or individuals through wealth, force, or other means outside of established institutions.
𝐏𝐨𝐥𝐢𝐭𝐢𝐜𝐚𝐥 𝐈𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧𝐬 𝐭→𝐃𝐞 𝐉𝐮𝐫𝐞 𝐏𝐨𝐥𝐢𝐭𝐢𝐜𝐚𝐥 𝐏𝐨𝐰𝐞𝐫 t
Institutions: Argument 4
There is more political power than political institutions
Called de facto political power.
Assuming can act collectively, amount of such power will
depend upon economic resources, which determine extent
to which can use existing political institutions and use
force against different groups.
𝐃𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧 𝐨𝐟 𝐫𝐞𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐭→𝐃𝐞 𝐟𝐚𝐜𝐭𝐨 𝐏𝐨𝐥𝐢𝐭𝐢𝐜𝐚𝐥 𝐏𝐨𝐰𝐞r t
Institutions: Argument 5
Political Institutions are Also Endogenous
-> Since result of societal choices, thus distribution of
political power, key determinant of political institutions
-> Leads to persistence
-> Pol. Institutions allocate de jure political power
-> Those who hold power influence evolution of political
institutions that give them political power
𝐏𝐨𝐥𝐢𝐭𝐢𝐜𝐚𝐥 𝐏𝐨𝐰𝐞𝐫 𝐭→𝐏𝐨𝐥𝐢𝐭𝐢𝐜𝐚𝐥 𝐈𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧𝐬 t + 1
Institutions: 2 Sources of Persistence
- Political institutions are durable (typically need large
change in political power to change them) - The rich → increase in de facto political power → ec./pol.
Institutions in their favour → maintain wealth
Interactions?
Does geography determine human behaviour
Barsbai et al(2020) Science
Memorise for the exam!
“Local convergence of behaviour across species”
-> divided word into pixels, and traced down every species to have evolved wihtin each pixel
-> studied territory(seasonal migration), food(food storage), mating (paternal provision))
1.which wild animals lie where
2.Assign typical behaviour observed in the wild to each animal
3. Comput avg animal behaviour for each celll
3. Correlate avg behaviour of animals in pixels, and avg behaviour of humans in these cells)
