The Curse of the Tropics - Bloom and Sachs (1998)

Question 1

where does GDP typically lie geographically?

Answer 1

huge amount lies in the northern hemisphere in the temperate zone
- NA, Europe, east Asia

near the equator, far lower income per-capita
- the farther you get, the richer societies are

broad global pattern that tropical areas are poorer

Question 2

key channels proposed by Bloom and Sachs

Answer 2

agricultural productivity

disease

transport costs

Question 3

agricultural factors

Answer 3

crop yields (per acre) are lower in SSA than any other region of the world

less and more variable rainfall
- drought more likely in arid and semi-arid regions
- common to experience extreme drought
- in Asia, distribution of rainfall fairly concentrated, Latin America has more variation
- no high rainfall areas in SSA, more ‘mass’ at lower levels so a lot of inhabited regions with low rainfall and arid areas

low soil quality
- heavily weathered, non-volcanic, dry/arid which means soils are less productive

parts of SSA have the most extreme temperatures

Question 4

is bad rainfall a plausible explanation for Africa’s growth collapse in the 1980s?

Answer 4

early 80s to 2000s were a period of anomalously low and bad rainfall in SSA way below average

since the 1950s, growth tracked rainfall patterns
- grew and fell in the 80s
- drop in rainfall in the 80s associated with a continental-wide drought

Question 5

why might highly variable rainfall reduce incomes?

Answer 5

choice between crop 1 and crop 2
- on average, richer growing crop 2 relative to crop 1
- crop 2 has a good yield but is risky as in a drought year you get nothing

which crop do you choose and why?
- storage technology
- risk aversion
- crop insurance
- diversification
- market access
- water storage

Question 6

what do Bloom and Sachs find in relation to bodies of water?

Answer 6

areas on the coast or on navigable rivers have a huge advantage in terms of trade

SSA is landlocked so even if agriculture is good, it’s at the expense of trade

Question 7

what do Bloom and Sachs find about extreme temperatures in SSA?

Answer 7

less technology transfer from wealthy temperate regions (across ecological zones)

transfer tends to spread east to west but limited by differences in ecological zones with different temperatures

big difference between the north-south orientation of Africa and the east-west orientation of Europe and Asia

this argument is more historical than contemporary since many relevant technologies don’t rely on climate as much now

Question 8

disease

Answer 8

life expectancy already lower in SSA before HIV/AIDS (in the 70s) even though this is an obvious factor as well

widespread tropical diseases (sleeping sickness, yellow fever, helminths, etc.)
- much more prevalent in the tropics and hot/humid settings

most important disease is malaria which kills 500,000 Africans annually

high historical levels of tropical disease reduced African population

neglected tropical diseases don’t get as much investment and innovation

Question 9

transport costs

Answer 9

critical determinants of trade and technology transfer

ratio of coastline to land area very low in Africa
- 1.15 in SSA compared to 2.54 in south Asia and 15.7 in western Europe

claims that transport costs by land are roughly 15x those by sea before rail travel

major rivers to the interior (Nile, Niger, Congo) with large cataracts
- only navigable in stretches
- prevented a lot of trade

large distance from major industrialised economies
- 28% of SSA population lives in land-locked countries