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3 - Development > Institititions, Geography and growth - geography > Flashcards

Institititions, Geography and growth - geography Flashcards

1
Q

what is first nature geography

A

physical geography factors can have a direct effect on development

  • climate
  • soil
  • disease
  • coastlines
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2
Q

what is second nature geography

A

human-made features that shape economic geography and growth

  • cities
  • transport
  • agriculture
  • spatial inequality
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3
Q

what are the 2 main channels through which geography can affect economic growth

A
  1. transport costs
  2. effect on productivity A - in a standard production function
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4
Q

how does transport costs affect economic growth

A
  • access to coast
  • ruggedness of land
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5
Q

how does geography affect productivity

A
  • disease environment
  • morbidity and HC
  • soil fertility
  • yields
  • temperature
  • less productive labour
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6
Q

is being landlocked a disadvantage for growth

A
  • evidence that resource rich countries that are LLDC are poorer than non-LLDC
  • but can be overcome with investment in transport - will mitigate barriers to trade
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7
Q

does malaria causally affect GDP growth

A

cant say
- there is correlation between malaria and low GDP levels

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8
Q

how do diseases affect economic development

A
  • tropical diseases are a burden for african countries
  • affect productivity
  • historically = constraint that colonisers faced
  • prevented French from buidling the panama canal
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9
Q

Sachs (2001)
malaria and GDP growth relationship

A
  • ran regression between GDP growth and malaria
  • find that malaria does correlate with GDP growth
  • could be OVB - not all controls of GDP growth included
  • looked at difference in GDP growth before and after malaria eradication
  • found that countries grow more after eradication
  • this not causal - many other things happening at the same time
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10
Q

why dont African countries eradicate malaria
Sachs (2001)

A

malaria is a policy outcome

  • dont have the state capacity - then disease becomes an indirect cause
  • GDP growth mainly affected by state capacity then
  • malaria is more difficult to eradicate in Africa
  • behavioural economics = cheap strategies do exist
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11
Q

does poor soil suitability affect development

A
  • there is a correlation between soil suitability and agricultural productivity
  • poorer suitability = lower yields
  • but there are cases where soil suitability is high and still low yields = so not strong correlation
  • technology plays a bigger role in shaping productivity than soil suitability
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12
Q

relationship between technology and agricultural yields

A

positive relationship
- more fertiliser = more yields

  • low soil suitability can be addressed through policy and investment so its not a curse
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13
Q

is physical geography a curse?

A
  • it hinders development but not a curse
  • can be overcome by policy
  • proved by ‘reversal of fortunes’ - institutions explain more than geography
  • bad natural environments are an obstacle - and can give other countries a head start
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14
Q

why are agglomerations good for development

A
  • make businesses more competitive in domestic and international markets
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14
Q

how can these be overcome

landscape - high transport costs
diseases
soil suitability
temperature

A
  • infrastructure
  • eradication with technology
  • fertilisers, irrigation
  • heating/cooling systems
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14
Q

what is agglomeration

A

the process by which businesses in the same industry flock together in one geographical area

15
Q

why are agglomerations bad

A
  • congestion
  • inequality
16
Q

what does the New Economic Geography framework do

A

explains stable concentration of economic activity

17
Q

NEG
why do agglomerations form

A
  • because firms benefit from specialisation and increasing returns to scale
  • so will concentrate in same location
  • circular centripetal forces will stabilise the equilibrium
18
Q

what are the circular centripetal forces that cause agglomerations

A
  • bigger market = more people locate in the city = greater number of specialised firms can be supported = more variety of goods produced at lower prices = consumers real incomes increase = more people = increases market
19
Q

how does the NEG model link to first nature

A

in NEG model - agglomeration stems naturally from population growth and specilalisation

  • but in reality centripetal forces start around pre-existing populations
20
Q

why is undesirable spatial equilibrium bad and what caused it

A
  • caused by agglomerations forming around advantages/disadvantages of first nature geography - higher densities of people already
  • effects of second nature geography is hard to alter
21
Q

Bleakley and Lin (2012)

what is an example of agglomeration and persistence in the US

A
  • persistence of agglomeration effects around portage sites in US
  • small villages created around sites where people has to dismount canoes and manually move goods down the waterfalls
  • canoes not used anymore
  • but higher population in these areas still persist - no economic benefit
  • these areas today are more densely populated and developed - even though no advantage
22
Q

is urbanisation a key component of economic growth

A

hard to evaluate because of reverse causality

23
Q

are cities good for growth
- even though they are a product of growth

A

yes they are good for growth
* knowlegde and productivity spillover effects between firms and people
* productivity gains from specialisation
* life quality
* one of the main factors behind structural transformation
* sustain economic growth

24
Q

how can urbanisation be bad for growth and a challenge for policy

A
  • inequality
  • sanitation
25
Q

what is the differnce between a production city and a consumption city

A

production city = productive advantage from agglomeration economies

consumption city = has disadvantages of agglomeration economies without the advantages

26
Q

are urbanisation and structural transformation related

A

typically there is a relationship

  • but for SSA - there is no clear link between urbanisation and structural transformation
  • consumption cities emerge in countries that rely on export of natural resources
27
Q

we have seen that cities can be resilient due to agglomeration forces

  • but is there scope for policy to alter spatial equilibria
A

yes, but there needs to be a big shock

  • resilience = Japan ww1 bombings
  • policy 1 = Berlin air traffic
  • policy 2 = transport infrastructure
28
Q

what is the spatial equilibria Japan example

A
  • despite large bombings
  • cities went back to previous size rapidly
  • no change in spatial equilibria
29
Q

example of policy scope - changing equilibria

Berlin air traffic

A
  • before ww1 berlin had most air traffic and economic activity
  • after division of germany
  • overtaken by Frankfurt and other airports
  • new equilibria persists
  • did no go back to pre war levels

3 - Development (16 decks)

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