Does Geography Explain Underdevelopment?
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1 AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment? Professor: Pamela Jakiela Department of Agricultural and Resource Economics University of Maryland, College Park Does Geography Explain Underdevelopment?
2 Tropical Geography Tropics: AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 4 At the root of Africa s poverty lies its extraordinarily disadvantageous geography, which has helped to shape its societies and its interactions with the rest of the world... As consequences of its climate, soils, topography, and disease ecology, Africa suffers from chronically low productivity (esp. food production), high disease burdens, and very low levels of international trade. Bloom and Sachs (1998) AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 5
3 On a map of the world in terms of product or income per head, the rich countries lie in the temperate zones, particularly in the northern hemisphere; the poor countries, in the tropics and semitropics. David Landes (1998) AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 6 You will find in the climates of the north, peoples with few vices, many virtues, sincerity, and truthfulness. Approach the south, you will think you are leaving morality itself, the passions become more vivacious and multiply crimes... The heat can be so excessive that the body is totally without force. The resignation passes to the spirit and leads people to be without curiosity, nor the desire for noble enterprise. Montesquieu (1748) AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 7
4 Fact: Incomes Are Lower in Tropical Countries PPP-adjusted GDP per capita in 2010: In tropical economies: $7,625 In non-tropical economies: $24,592 In tropical Africa: $3,129 In non-tropical Africa: $16,611 Fact: Question: why might being tropical cause slower development? Answer: AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 8 Fact: Agriculture Is Less Productive in the Tropics Source: Diamond (Nature, 2002) AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 9
5 Fact: Agriculture Is Less Productive in the Tropics Climatic and ecological factors explaining low agricultural productivity: Higher temperatures at sea level Plant photosynthesis less productive About twelve hours of daylight year round Many crops less productive than in temperate summers Prevalence of rain forests Nutrients held in plant matter, not soil; lost with deforestation Precipitation patterns (monsoon vs. dry season) Rain falls in short, intense bursts AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 10 Plant, Animal Domestication Depended on Luck Source: Diamond (Nature, 2002) AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 12
6 Plant, Animal Domestication Depended on Luck Source: Diamond (Nature, 2002) Wild ancestors of plants, animals that were domesticated differ from species that weren t; those suitable for domestication were quite rare Zebras are close relatives of horses, but with incredibly good peripheral vision that prevented humans from capturing them Almonds are closely related to acorns, but the mutation that makes them edible is not passed from one generation to the next in acorns AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 13 Plant, Animal Domestication Depended on Luck Source: Diamond (Nature, 2002) AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 14
7 Tropical Diseases Diseases are often specific to ecological or climatic environments Tropics: no freezing, except at high altitudes Diseases such as malaria, schistosomiasis can survive, and are difficult to eradicate; but are not present in temperate regions Africa may be a uniquely challenging disease environment Humans evolved there, and so did diseases that attack humans Many temperate diseases have been eradicated AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 15 Tropical Diseases: Malaria Source: World Malaria Report 2014 Malaria is a disease that infects humans through a mosquito vector Most dangerous variants confined to tropics, esp. tropical Africa AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 16
8 Tropical Diseases: Malaria Source: World Malaria Report 2014 In 2013, there were 198 million cases of malaria and 584 thousand deaths 163 million cases and 528 thousand deaths were in Africa 78 percent of the deaths were children under 5 years of age AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 17 Neglected Tropical Diseases Neglected tropical diseases such as dengue and sleeping sickness kill more than 500 thousand people per year, mostly in the tropics The most common NTDs (e.g. soil-transmitted helminths) arenot fatal, but can lower productivity through their debilitating effects AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 18
9 Does Geography Matter? Testing the Geography/Endowments Hypothesis Null hypothesis (H 0 ): H 0 : geography doesn t impact current economic development Variables: Variable Mean S.D. Median Min. Max. Obs. GDP per capita in , , , , Log GDP per capita in Africa South Asia Q: what is the relationship between latitude and income per capita? AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 20
10 Testing the Geography/Endowments Hypothesis A scatter plot: a graph that displays the values of (typically) two variables as a system of Cartesian coordinates Scatter plot of GDP per capita by absolute latitude Log GDP per capita in BEN MEX NPL USA RUS Data from 2010 World Development Indicators and Acemoglu, Johnson, and Robinson (2001) AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 22 Testing the Geography/Endowments Hypothesis Q: what is the relationship between latitude and income per capita? Scatter plot of GDP per capita by absolute latitude Log GDP per capita in QAT KWT LUX SGP ARE NOR OMN HKG SAU USA CHE BHR AUS AUT BEL DEU NLD IRL DNK CANSWE JPN ESP ITA FRA GBR FINISL TTO LBY ISR KORGRCNZL MLT PRT SVN CZE BHS SVK MYS HUN EST CHL HRV KAZ POL LTU RUS GAB VEN AZE BGR BLR BRA BRB IRN ROM LVA SUR PAN MUS URY TUR MEX CRI THA BWA DZA IRQ COL ZAF DOM EGY JOR MKD PER TUN ECU CHN TKM BLZ BIH IDN JAM NAM LKA SLVGTM FJI UKR AGO PRY BTN MAR ARM GUY GEO MNG COG PHL CPV SWZ NGA BOL YEM NICHND VNM IND LAO PAK UZB MDA GHA SDN STP CIV DJI ZMB KGZ CMR MRT KEN PNG SEN BGD LSO TCD NPL TJK TZA BEN GMB MLI HTI AFG COM BFA MDG ZWE UGA RWA TGO SLE GIN GNB ETH ERI CAF NERMOZ BDI LBR MWI ZAR Data from 2010 World Development Indicators and Acemoglu, Johnson, and Robinson (2001) AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 23
11 Testing the Geography/Endowments Hypothesis Q: what is the relationship between latitude and income per capita? Other ways of asking the same question: On average, do countries that are further from the equator (i.e. those with higher absolute latitudes) have higher incomes? Is there a positive association between latitude and income? Absolutely made-up variable A Positive Association Absolutely made-up variable A Negative Association AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 24 Testing the Geography/Endowments Hypothesis The correlation coefficient is Correlation = 1 indicates a strong, positive association Correlation = 0 indicates no association Correlation = 1 implies strong, negative association Absolutely made-up variable A Positive Association Absolutely made-up variable A Negative Association correlation = correlation = AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 25
12 Testing the Geography/Endowments Hypothesis Scatter plot of GDP per capita by absolute latitude Log GDP per capita in QAT KWT LUX SGP ARE NOR OMN HKG SAU USA CHE BHR AUS AUT BEL DEU NLD IRL DNK CANSWE JPN ESP ITA FRA GBR FINISL TTO LBY ISR KORGRCNZL MLT PRT SVN CZE BHS SVK MYS HUN EST CHL HRV KAZ POL LTU RUS GAB VEN AZE BGR BLR BRA BRB IRN ROM LVA SUR PAN MUS URY TUR MEX CRI THA BWA DZA IRQ COL ZAF DOM EGY JOR MKD PER TUN ECU CHN TKM BLZ BIH IDN JAM NAM LKA SLVGTM FJI UKR AGO PRY BTN MAR ARM GUY GEO MNG COG PHL CPV SWZ NGA BOL YEM NICHND VNM IND LAO PAK UZB MDA GHA SDN STP CIV DJI ZMB KGZ CMR MRT KEN PNG SEN BGD LSO TCD NPL TJK TZA BEN GMB MLI HTI AFG COM BFA MDG ZWE UGA RWA TGO SLE GIN GNB ETH ERI CAF NERMOZ BDI LBR MWI ZAR Data from 2010 World Development Indicators and Acemoglu, Johnson, and Robinson (2001) Q: What is the correlation between income and latitude? A: AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 26 Testing the Geography/Endowments Hypothesis Under 5 mortality ZAR CAF AGO BDI CIV BFA GIN COG CMRTGO ZMB BEN UGA KEN Scatter plot of under 5 mortality by absolute latitude SLE LBR GHA ETH SOM GNB NGA TCD DJI COM MWI GMB SDN MLI NER HTI MOZ ZWE MRT LAO SWZ LSO PAK AFG GAB RWA PNG SEN TZA YEM MDG IND TJK STP ERI MMR BWA TKM ZAF BOL NAMBGD BTN NPL UZB GUY AZE IDN GTM IRQ PHL MAR DOM PRK KGZ MNG ECU NIC SUR COL BRA BRB HND FJI EGY PAN PER TTO VNM CPV PRY BLZ DZA GEO JAM BHS JOR IRN KAZ VEN SLV MEXLBY ARM ARG CHN MDA THA MUS TUN SYR TUR CRI OMN BGR MYS AREBHR KWT ROM LKA SAU QAT CHL URY MKD UKR AUS ISR MLT GRC ESP BIH ITA HRV FRA HUN JPN KOR CHE AUTCZEDEU BEL BLR IRL GBRDNK LTU LVA RUS USA PRTNZL SVK POL SGP SVN EST CAN LUX NLD SWE NORFINISL Data from 2010 World Development Indicators and Acemoglu, Johnson, and Robinson (2001) Q: What is the correlation between child mortality and latitude? A: AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 27
13 Testing the Geography/Endowments Hypothesis Higher income per capita Distance from the equator (absolute latitude) Lower child mortality Unanswered questions: How much higher is income in temperate countries? How much of the variation in income is explained by geography? Does tropical geography cause underdevelopment? AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 28 Study Guide: Key Terms tropics malaria neglected tropical diseases soil-transmitted helminths null hypothesis scatter plot positive association correlation AREC 345: Global Poverty & Economic Development Lecture 3: Does Geography Explain African Underdevelopment?, Slide 29
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