Institititions, Geography and growth - geography Flashcards
what is first nature geography
physical geography factors can have a direct effect on development
- climate
- soil
- disease
- coastlines
what is second nature geography
human-made features that shape economic geography and growth
- cities
- transport
- agriculture
- spatial inequality
what are the 2 main channels through which geography can affect economic growth
- transport costs
- effect on productivity A - in a standard production function
how does transport costs affect economic growth
- access to coast
- ruggedness of land
how does geography affect productivity
- disease environment
- morbidity and HC
- soil fertility
- yields
- temperature
- less productive labour
is being landlocked a disadvantage for growth
- 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
does malaria causally affect GDP growth
cant say
- there is correlation between malaria and low GDP levels
how do diseases affect economic development
- tropical diseases are a burden for african countries
- affect productivity
- historically = constraint that colonisers faced
- prevented French from buidling the panama canal
Sachs (2001)
malaria and GDP growth relationship
- 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
why dont African countries eradicate malaria
Sachs (2001)
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
does poor soil suitability affect development
- 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
relationship between technology and agricultural yields
positive relationship
- more fertiliser = more yields
- low soil suitability can be addressed through policy and investment so its not a curse
is physical geography a curse?
- 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
why are agglomerations good for development
- make businesses more competitive in domestic and international markets
how can these be overcome
landscape - high transport costs
diseases
soil suitability
temperature
- infrastructure
- eradication with technology
- fertilisers, irrigation
- heating/cooling systems
what is agglomeration
the process by which businesses in the same industry flock together in one geographical area
why are agglomerations bad
- congestion
- inequality
what does the New Economic Geography framework do
explains stable concentration of economic activity
NEG
why do agglomerations form
- because firms benefit from specialisation and increasing returns to scale
- so will concentrate in same location
- circular centripetal forces will stabilise the equilibrium
what are the circular centripetal forces that cause agglomerations
- 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
how does the NEG model link to first nature
in NEG model - agglomeration stems naturally from population growth and specilalisation
- but in reality centripetal forces start around pre-existing populations
why is undesirable spatial equilibrium bad and what caused it
- 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
Bleakley and Lin (2012)
what is an example of agglomeration and persistence in the US
- 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
is urbanisation a key component of economic growth
hard to evaluate because of reverse causality
