Deep Roots of Comparative Development Oded Galor AEA Continuing Education Program Lecture III - AEA 2014 Oded Galor Roots of Comparative Development Lecture III - AEA 2014 1 / 41
Deep Roots of Comparative Development The Origins of Inequality in Income per Capita across the Globe in 2010 0-1000 1000-3000 3000-5000 5000-10000 10000-15000 15000-20000 20000-30000 30000-40000 40000+ Oded Galor Roots of Comparative Development Lecture III - AEA 2014 2 / 41
Deep Roots of Comparative Development Deeply-Rooted Factors of Comparative Development Persistent effects of: Geographical characteristics: Climate, Soil quality, Latitude, Isolation Biogeographical conditions that triggered the Neolithic Revolution (NR) Domesticable species, Orientation of continents (Diamond, 1997) Migratory distance from the cradle of humankind in East Africa to indigenous settlements across the globe: Variation in genetic diversity across countries (Ashraf-Galor, AER 2013) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 3 / 41
Deep Roots of Comparative Development The Neolithic Revolution The Neolithic Origins of Comparative Development Diamond s Hypothesis The transition from hunter-gatherer tribes to agricultural communities: Emergence of non-food-producing class: = Knowledge creation (science, technology & written languages) Technological head start and its persistent effect via: Urbanization, nation states, colonization Variations in biogeographical characteristics conducive for the NR: = Origins of the observed patterns of comparative development Oded Galor Roots of Comparative Development Lecture III - AEA 2014 4 / 41
Deep Roots of Comparative Development The Neolithic Revolution Variation in the Onset of the Neolithic Revolution 0-2000 2000-4000 4000-6000 6000-8000 8000-10000 10000+ Oded Galor Roots of Comparative Development Lecture III - AEA 2014 5 / 41
Deep Roots of Comparative Development The Neolithic Revolution Independent Origins Source: Diamond (Nature 2002) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 6 / 41
Deep Roots of Comparative Development The Neolithic Revolution Biogeographical Origins of the Onset of the Neolithic Revolution Geographical factors that maximized biodiversity (climate, latitude, landmass) Availability of domesticable species of plants and animals = Onset of domestication Orientation of continents: = Diffusion of agricultural practices along similar latitudes Oded Galor Roots of Comparative Development Lecture III - AEA 2014 7 / 41
Deep Roots of Comparative Development The Neolithic Revolution Orientation of Continents Source: Diamond (Nature 2002) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 8 / 41
The Diamond Hypothesis Testable Predictions The Diamond Hypothesis The domination of Euro-Asia in the pre-colonial era reflects: Larger number of domesticable species of plants and animals East-West orientation = Technological head start The economic domination of Europeans and their offshoots in the contemporary world reflects: Persistence of head start = Guns, Germs and Steel Oded Galor Roots of Comparative Development Lecture III - AEA 2014 9 / 41
The Diamond Hypothesis Testable Predictions Testable Predictions Earlier onset of the Neolithic Revolution yields: Over the entire course of development Technological superiority During the Malthusian epoch Higher population density Negligible effect on income per capita Over the contemporary era Higher income per capita (accounting for the time elapsed since the ancestral populations of a country experienced the NR) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 10 / 41
The Diamond Hypothesis Persistence of Technological Head Start The Neolithic Revolution (NR) & Technological Level: 1000 BCE 2000 CE (1) (2) (3) (4) Dependent Variable: Log Technological Level 1000 BCE 1500 CE 2000 2000 Log Years since NR 4.34*** 1.05*** -0.12 (1.24) (0.07) (0.92) Log Years since NR 0.128 (Ancestry Adjusted) (0.08) Continent Dummies Yes Yes Yes Yes Observations 112 143 132 132 R 2 0.24 0.51 0.48 0.46 Robust standard errors in parentheses; *** p<0.01, ** p<0.05, * p<0.1. Source: Ashraf-Galor (AER 2011); Ashraf-Galor (2014) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 11 / 41
The Diamond Hypothesis Association with Population Density The Neolithic Revolution on Population Density in 1500 OLS OLS OLS OLS IV (1) (2) (3) (4) (5) Dependent Variable: Log Population Density in 1500 Log years since Neolithic 0.833*** 1.025*** 1.087*** 1.389*** 2.077*** (0.298) (0.233) (0.184) (0.224) (0.391) Log land productivity 0.641*** 0.576*** 0.573*** 0.571*** (0.059) (0.052) (0.095) (0.082) Log absolute latitude -0.353*** -0.314*** -0.278** -0.248** (0.104) (0.103) (0.131) (0.117) Mean distance to nearest -0.392*** 0.220 0.250 coast or river (0.142) (0.346) (0.333) % land within 100 km 0.899*** 1.185*** 1.350*** of coast or river (0.282) (0.377) (0.380) Continental dummies Yes Yes Yes Yes Yes Observations 147 147 147 96 96 R 2 0.40 0.66 0.73 0.73 0.70 First-stage F-statistic 14.65 Overidentification p-value 0.44 Instrumental variables: number of prehistorical domesticable species of plants and animals. Robust standard errors in parentheses; *** p<0.01, ** p<0.05, * p<0.1. Oded Galor Roots of Comparative Development Lecture III - AEA 2014 12 / 41
The Diamond Hypothesis Association with Income per Capita The Neolithic Revolution and Income per Capita: 1 1500 CE OLS OLS OLS OLS OLS OLS (1) (2) (3) (4) (5) (6) Log Income per Capita Log Population Density 1500 1000 1 1500 1000 1 Log years since Neolithic 0.159 0.073 0.109 1.337*** 0.832*** 1.006*** (0.136) (0.045) (0.072) (0.594) (0.363) (0.483) Log land productivity 0.041-0.021-0.001 0.584*** 0.364*** 0.681*** (0.025) (0.025) (0.027) (0.159) (0.110) (0.255) Log absolute latitude -0.041 0.060-0.175 0.050-2.140** -2.163** (0.073) (0.147) (0.175) (0.463) (0.801) (0.979) Mean distance to nearest 0.215-0.111 0.043-0.429-0.237 0.118 coast or river (0.198) (0.138) (0.159) (1.237) (0.751) (0.883) % land within 100 km of 0.124-0.150 0.042 1.855** 1.326** 0.228 coast or river (0.145) (0.121) (0.127) (0.820) (0.615) (0.919) Continental dummies Yes Yes Yes Yes Yes Yes Observations 31 26 29 31 26 29 R 2 0.66 0.68 0.33 0.88 0.95 0.89 Robust standard errors in parentheses; *** p<0.01; ** p<0.05; * p<0.1. Oded Galor Roots of Comparative Development Lecture III - AEA 2014 13 / 41
The Diamond Hypothesis Association with Income per Capita The Neolithic Revolution and Population Density in 1500 Conditional on land productivity, geographical factors, and continental fixed effects. Source: Ashraf-Galor (AER 2011) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 14 / 41
The Diamond Hypothesis Association with Income per Capita The Neolithic Revolution and Population Density in 1500 (Income Sample) Conditional on land productivity, geographical factors, and continental fixed effects. Source: Ashraf-Galor (AER 2011) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 15 / 41
The Diamond Hypothesis Association with Income per Capita The Neolithic Revolution and Income per Capita in 1500 Conditional on land productivity, geographical factors, and continental fixed effects. Source: Ashraf-Galor (AER 2011) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 16 / 41
The Diamond Hypothesis Association with Current Income per Capita The Neolithic Revolution and Income per Capita in 2005 OLS OLS OLS OLS (1) (2) (3) (4) Log Income per Capita in 2005 Log years since Neolithic 0.525* 0.010-0.336 (0.276) (0.216) (0.272) Log years since Neolithic 0.211 (ancestry adjusted) (0.322) Log land productivity -0.379*** -0.515*** -0.494*** (0.080) (0.077) (0.078) Log absolute latitude 0.765*** 0.353** 0.375*** (0.149) (0.138) (0.142) Mean distance to nearest -0.462-0.465* -0.425 coast or river (0.302) (0.261) (0.260) % land within 100 km 1.624*** 0.686* 0.768** of coast or river (0.364) (0.367) (0.361) Continental dummies No No Yes Yes Observations 143 143 143 143 R 2 0.04 0.47 0.62 0.62 Robust standard errors in parentheses; *** p<0.01, ** p<0.05, * p<0.1. Oded Galor Roots of Comparative Development Lecture III - AEA 2014 17 / 41
The Diamond Hypothesis Association with Current Income per Capita The Neolithic Revolution and Income per Capita in 2005 Income per Capita in 2005 4 2 0 2 4 JPN USA GAB KOR CAN KAZAF AUS ISR TUR MYS CHE DNK BWASWZ IRLTHA ARE COG GBR RWA BEL MEX AUT QAT ESP FRA AGO LSO FIN SWEECU NGA NLD UGA ITA DEU TUN NAMNOR SAU CMR NZL KEN DZA BRA ZMB COL VEN PRT KWT MAR LBN LBY AZECIV GRC BEN IDN LKA RUS GTM TCD PAN CZE TGO ARM CHN IRN ARG URY DOM BFA SLV CRI CUBGHA ZWE MWI LTU EST PHL TZA GEO PER CHL TKM SVN HUN SDN LVA BLZ OMN POL SENHRV IND BDI SYR CAFIRQ KHM BTN MNG VNM UZB MLI ZAR ROM KGZ HND NICPRY GUY GIN GMB JOR SLE MOZ BOL GNB MKD BGR PAK ETH MDG BLR NPL BGD LAO TJK NER YEM UKR MRT BIHAFG ALB HTI LBR PNG MDA EGY 1.5 0.5 1 Years Elapsed since the Neolithic Revolution (Ancestry Adjusted) coef =.21117707, (robust) se =.32236237, t =.66 Conditional on land productivity, geographical factors, and continental fixed effects. Source: Ashraf-Galor (2014) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 18 / 41
The Neolithic Revolution Life Expectancy The Neolithic Origins of Contemporary Variation in Life Expectancy The Neolithic Revolution increased the exposure and the vulnerability of humans to infectious diseases via: the rise in population density the domestication of animals the increase in work effort Natural selection of individuals who were genetically pre-disposed towards resistance to infectious diseases (Galor-Moav, 2005) Variation in the timing of the Neolithic Revolution among the ancestral populations of each county contributed to the variation in life expectancy across countires (Galor-Moav, 2007) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 19 / 41
The Neolithic Revolution Life Expectancy The Neolithic Origins of Variation in Life Expectancy in 2004 OLS OLS OLS IV (1) (2) (3) (4) Life Expectancy in 2004 Log years since Neolithic 1.559*** 1.463*** 1.635*** 1.909** (ancestry adjusted) (0.461) (0.355) (0.444) (0.889) Log land productivity -1.386*** -1.636*** -1.371*** (0.350) (0.444) (0..519) Log absolute latitude 0.195*** 0.124* 0.055 (0.053) (0.068) (0.048) Mean distance to nearest 5.030*** 7.130*** -5.121*** coast or river (1.084) (1.937) (1.668) Island 9.365*** 8.083 9.154*** (1.990) (2.723) (2.670) Continental dummies Yes Yes Yes Yes Observations 146 146 96 96 R 2 0.71 0.80 0.86 First-stage F-statistic 13.55 Instrumental variable: number of prehistorical domesticable animals. Robust standard errors in parentheses; *** p<0.01, ** p<0.05, * p<0.1. Oded Galor Roots of Comparative Development Lecture III - AEA 2014 20 / 41
The Neolithic Revolution Life Expectancy The Neolithic Origins of Variation in Life Expectancy in 2004 LIfe Expectancy in 2004 20 10 0 10 20 DZA TUN MAR ISR EGY GHA MYS KOR THA SDN VNM ECU RWA GAB CRI ESP ITA CHE FRA AUS GRC JPN KAZ IDN GBR BEL KGZ TGO CHN SYR PAN UZB COL IRL GEO DNK PER LKA TZA NLD MEX VEN COG GMB SEN AUT PRTCAN BGD NAM SWE BLZ ARE CHL BFA TJK NOR POL MDG HND DOM NIC SAU SLV BRA BENQAT USA ARM UGA ETH KEN SVN BDI NZL CZE NER AZE BIH HRV ALB DEU IRNTUR URY ARG MKD FIN PRK MNG MWI NPL RUS GTMTCD NGA PRY MRT CMR OMN ZARCIV LTU MMR LAO MLI GIN KWT HUN BGR IRQ JOR LBN IND LBR GUYTKM ROM CUB PAK EST KHM LVAAGO PNG BWA BTN PHL ZAF CAF MOZ BOL ZMB UKR BLR GNB SOM MDA YEM SWZ ZWE SLE HTI LSO 4 2 0 2 4 Time Elapsed Since the Neolithic Revolution coef = 1.4625621, (robust) se =.35539057, t = 4.12 AFG LBY Conditional on land productivity, geographical factors, and continental fixed effects. Source: Galor-Moav (2007) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 21 / 41
The Neolithic Revolution Life Expectancy The Neolithic Origins of Mortality from Infectious Diseases in 2004 OLS OLS OLS IV (1) (2) (3) (4) Years of Life Lost to Infectious Disease 2004 Log years since Neolithic -3.818*** -3.593*** -3.504*** -8.664** (ancestry adjusted) (1.160) (0.918) (1.286) (2.918) Log land productivity 3.000*** 2.016*** 2.150 (0.899) (1.468) (1.572) Log absolute latitude -0.571*** -0.407*** -0.380 (0.124) (0.164) (0.192) Mean distance to nearest 8.026*** 10.07*** 9.133* coast or river (3.032) (4.583) (5.514) Island -25.39*** -18.24* -28.56** (7.977) (10.90) (13.29) Continental dummies Yes Yes Yes Yes Observations 146 146 96 96 R 2 0.77 0.84 0.87 First-stage F-statistic 17.59 Instrumental variable: number of prehistorical domesticable animals. Robust standard errors in parentheses; *** p<0.01, ** p<0.05, * p<0.1. Oded Galor Roots of Comparative Development Lecture III - AEA 2014 22 / 41
The Neolithic Revolution Life Expectancy The Neolithic Origins of Mortality from Infectious Diseases in 2004 Mortality from Infectious Diseases in 2004 40 20 0 20 40 AFG HTI TJK MDG BOL PAK BTN YEM LSO KHMBWA SWZ PNG BGD NAM NPLAO PHL FIN MMR ZWE NOR GTM MOZ SWE PRK EST AGO LVA IRL MWI PER HND MRT TKM GBR ZMB UZB PRY MLI GNB LBR NER SLE IND ZAF DOM GUY IRQ LTU BLR MNG DNK BEL TZA CHE BLZ TCD NLD SOM POL NGA COG SEN BFA GIN NIC UKR JPN GEOECU PAN GMB CMR SLV BRA BEN NZL RUS THA VNMKGZ MEX CHL SAU ZAR TGO CZE AUT KEN AZE MDA ETH PRTSVN CIVBIH HRV FRA ARG ROM ALBDEU JOR CUB ARE GHA CAF ESP HUN BGR MKDITA RWA GAB OMNQAT KWT CAN URY IRNTUR GRC VEN BDI UGA SYR COL AUS USA LBN IDN KAZ MYS LKA DZA ARM TUN CHN SDN CRI MAR ISR EGY KOR LBY 4 2 0 2 4 Years Elapsed Since the Neolithic Revolution coef = 3.5926452, (robust) se =.91783991, t = 3.91 Conditional on land productivity, geographical factors, and continental fixed effects. Source: Galor-Moav (2007) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 23 / 41
Geographical Factors Persistence and Reversals Persistence and Reversals in the Role of Geographical Factors Dynamics of the geographical patterns of comparative development Reversal in the role of Land Productivity Distance from the equator Persistence in the role of Disease environment Ecological diversity Geographical Isolation Range of land quality Land suitable for large plantations Oded Galor Roots of Comparative Development Lecture III - AEA 2014 24 / 41
Geographical Factors Reversals Reversal in the Role of Land Productivity & Absolute Latitude Land productivity 1-1500 CE Positive association with population density 2000s Negative association with income per capita Absolute latitude 1-1500 CE Negative association with population density 2000s Positive association with income per capita Oded Galor Roots of Comparative Development Lecture III - AEA 2014 25 / 41
Geographical Factors Reversals Reversal in the Role of Land Productivity World Non-Colony Ex-Colony World Non-Colony Ex-Colony sample sample sample sample sample sample (1) (2) (3) (4) (5) (6) Log Population Density Log Income per Capita Log years since Neolithic 1.111*** 0.769* 1.383*** (0.188) (0.447) (0.267) 1500 2005 Log years since Neolithic 0.211-0.100 0.083 (ancestry adjusted) (0.322) (0.559) (0.382) Log land productivity 0.568*** 0.550*** 0.585*** -0.494*** -0.518*** -0.456*** (0.053) (0.057) (0.115) (0.078) 0.087 0.141 Log absolute latitude -0.330*** -0.491*** -0.302** 0.375*** 0.891** 0.139 (0.106) (0.136) (0.123) (0.142) (0.432) (0.149) Continental dummies Yes Yes Yes Yes Yes Yes Observations 143 68 75 143 68 75 R 2 0.73 0.72 0.70 0.62 0.64 0.57 Additional Controls: mean distance to nearest coast & river and % land within 100 km of coast & river. Robust standard errors in parentheses; *** p<0.01, ** p<0.05, * p<0.1. Oded Galor Roots of Comparative Development Lecture III - AEA 2014 26 / 41
Geographical Factors Reversals Origins of the Reversal in the Role of Land Productivity The effect is nearly identical in the: World sample Former colonies sample (Acemoglu-Johnson-Robinson, QJE 2002) Non-former colonies sample = Reversal in the role of land productivity is largely independent of the forces of colonialism Acquired comparative advantage in agriculture & delayed industrial transition Oded Galor Roots of Comparative Development Lecture III - AEA 2014 27 / 41
Geographical Factors Reversal: Land Productivity Land Productivity and Population Density in 1500 Log Population Density in 1500 2 1 0 1 2 3 OMN ARE KWT QAT RWA BDI PAK JPN NPL IND CHE CUBMEX CHN KOR AUTBEL HTI BFA BGD CZE AGO PER NLD ITA BOL FRA GBR DEU GIN DOMGTM KHM NGA SYR HND IRL ECU PRT NZL CHL BLZ CRI PAN ZWE COLPNG CAF MOZ SEN DNK CIV ESP NIC UGA BEN TUN MKD TGO LKA POL AFG MAR GHA TUR AZE SLE TZA ZMB ISR VNM GEO HUN ROM SLV KAZ THA ARM EGY KGZ YEM RUSLBR BIH IRN IRQPRY UZB SDN MWI SVN TCD LVA JOR TKM LAOGNB TJKBGR GMB ETH LSO MLI MDGIDN HRV CMR LBN MNG SWE DZAZAR NER EST KEN ALB AUS GRC ZAF SWZ MRT BWA COG VEN LTU SAU CAN BLR NOR SUR GAB GUY ARGUKR USA NAM BRA MDA URY PHL LBY FIN 4 2 0 2 Log Land Productivity coef =.56769725, (robust) se =.05303816, t = 10.7 MYS Conditional on years since Neolithic transition, geographical factors, and continental fixed effects. Source: Ashraf-Galor (AER 2011) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 28 / 41
Geographical Factors Reversal: Land Productivity Land Productivity and Income per Capita in 2005 Log Income per Capita in 2005 4 2 0 2 4 OMN ARE QAT KWT GAB CAN JPN BWA USA NOR SAULBY COG MYS CHE ISR KOR NAM FIN ZAF SWE DZA AGOIRL AUS AUT DNK KAZ COL ECU NLD GBR BEL VEN BRA KEN NZL CHLRUS PRT DEU SWZ MEX ESP ITA FRA TUR PERTCD SVN TKM CRI PAN GRC CMR TUN IDNIRNZMB CIV UGA THA MARLBNGA MRT MNG JOR BLZ EST EGY ZARMLICAF GUY BTN LVA ZWE TZA SDN CZE ARG RWA URY LSO LTU SEN IRQ HRV LKA GTM DOM HUNCHN CUB POL SLV BFA GHA BENARMAZE PHL GEOSYR TGO YEM NERBOL MOZ SLE KGZ PRY HND GIN UZB MDG LAOGNB NIC PAK ROMMWI BDI BGR MKD VNM GMB IND KHM BLR TJK ETH LBR BIH ALB PNG NPL AFG UKR BGD HTI MDA 4 2 0 2 Log Land Productivity coef =.49436427, (robust) se =.07843498, t = 6.3 Conditional on years since Neolithic transition, geographical factors, and continental fixed effects. Source: Ashraf-Galor (AER 2013) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 29 / 41
Geographical Factors Reversal: Distance from the Equator Reversal in the Role of Distance from the Equator World Non-Colony Ex-Colony World Non-Colony Ex-Colony sample sample sample sample sample sample (1) (2) (3) (4) (5) (6) Log Population Density Log Income per Capita Log years since Neolithic 1.111*** 0.769* 1.383*** (0.188) (0.447) (0.267) 1500 2005 Log years since Neolithic 0.211-0.100 0.083 (ancestry adjusted) (0.322) (0.559) (0.382) Log land productivity 0.568*** 0.550*** 0.585*** -0.494*** -0.518*** -0.456*** (0.053) (0.057) (0.115) (0.078) 0.087 0.141 Log absolute latitude -0.330*** -0.491*** -0.302** 0.375*** 0.891** 0.139 (0.106) (0.136) (0.123) (0.142) (0.432) (0.149) Continental dummies Yes Yes Yes Yes Yes Yes Observations 143 68 75 143 68 75 R 2 0.73 0.72 0.70 0.62 0.64 0.57 Additional Controls: mean distance to nearest coast & river and % land within 100 km of coast & river. Robust standard errors in parentheses; *** p<0.01, ** p<0.05, * p<0.1. Oded Galor Roots of Comparative Development Lecture III - AEA 2014 30 / 41
Geographical Factors Reversal: Distance from the Equator Distance from the Equator and Population Density in 1500 RWA Log Population Density in 1500 2 1 0 1 2 UGA COG ZAR GAB KEN MYS ECU IDN BDI AUTNPL PER BEL AGO CUB YEM NLD COL INDHTI MEX LKA PNG KHM ITA CZEBOL CHN KOR EGY PAN CRI PRTFRA IRL GBR BFA CAFOMN ESP NIC BGD HND DEU DOM GIN BLZ MRT TZALBR RUSCIV MKD SAU GTM CHL ARE SLE NOR NGA BEN POL DNKJOR BWA SUR GHASWE VNM SVN ZMB MNG AFGSEN MOZ NZL SYR ZWE VEN THALAO TGO BIH LVA ROM HUN SLV KGZ TCDISR CMR GUY ALB ETH BGR HRV QAT ESTUZB TKM IRN KWT TJK KAZ IRQ MLI MAR TUN GNB NER SDN NAM GEO PRY TUR MDG DZA GRCAUSMWI AZE ARM GMB BLR LTU FIN CAN LBY LBN ZAF LSO BRA SWZ PHL PAK JPN CHE UKR MDA ARG USA URY 2 1 0 1 2 Log Absolute Latitude coef =.33068066, (robust) se =.10617177, t = 3.11 Conditional on years since Neolithic transition, geographical factors, and continental fixed effects. Source: Ashraf-Galor (AER 2011) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 31 / 41
Geographical Factors Reversal: Distance from the Equator Distance from the Equator and Income per Capita in 2005 Log Income per Capita in 2005 4 2 0 2 4 GAB MYS COG UGA KEN ECU ZAR RWA COL IDN LKA BDI GUY PNG JPN USA CAN KOR ZAF ISR AUS KAZTUR CHEDNK BWA SWZ TUN ESP THA ITA ARE FRA QAT AUT DEU BEL IRL MEX NGA NLD GBRAGO LBY NZL DZA MAR SWELBN CMR SAUKWT NOR FIN AZE NAM BRAGRC PRT CIV BENIRN CHN ZMBARM ARG LSO URY VEN GHA TGO PAN CRI RUS PHL TZA PER IND SVN HUN CZE SLV GTM TCD HRVPOL CAF OMNROM BLZ LVA LTU EST BFA SDN DOM TKM SYR CUB SENGEO CHL ZWE IRQMWI MLI KHMVNM ETH MKD BGR NIC SLEHND GIN BTN PAK JOR UZB KGZ MNG GMB PRY MOZ BOLGNB LAO BGD NPL TJK NER ALB BIH BLR MRTMDG EGY UKRAFG HTI YEM LBR MDA 3 2 1 0 1 Log Absolute Latitude coef =.37452849, (robust) se =.14185733, t = 2.64 Conditional on years since Neolithic transition, geographical factors, and continental fixed effects. Source: Ashraf-Galor (AER 2013) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 32 / 41
Geographical Factors Reversal: Distance from the Equator Origins of the Reversal in the Role of Distance from the Equator The effect is qualitatively simialr in the: World sample Non-former colonies sample = Reversal in the role of distance from the equator is largely independent of the forces of colonialism Temperate drift hypothesis: Advanced technologies gradually complemented production in temperate zones Oded Galor Roots of Comparative Development Lecture III - AEA 2014 33 / 41
Geographical Factors Persistent: Institutions & Human Diversity Population Density in 1500 and Income per Capita in 2005 World Sample Log Income per Capita in 2005 4 2 0 2 4 CAN AUS NOR QAT USA ARE IRL FIN SWE DNKCHE KWT GBRAUT NLD DEU FRA BELJPN NZL ITA ESP GRC SVNPRT ISR BHR KOR OMNSAU CZE EST HRVHUN LBY CHL LTU ARG URY BRA BWA VEN ZAF RUS MYS GAB LVA MEX TUR POL LBN NAM KAZ DZACOL CUB DOM BLZ CRI PAN ROM BGR PER SLVECU IRN BLR TUN SWZ GTMJOR THA ALB BIH MKD PRY TKM AGO COG UKRMAR HND ARM AZE GUY MNG BOL NIC PHLIRQ GEO SYRCHN EGY IDN LKA CMR LSOMRT PNG MDA YEM CIV NGA TCD ZMB SDN SENVNM IND PAK MLI ZWE KGZ UZB HTI LAOKEN BEN GHA TJK NER MDG MOZ CAF TZA BFA GMB KHM GNB TGO BGD GIN SLE UGA NPL AFG RWA MWI ETH LBR ZAR BDI 4 2 0 2 4 Log Population Density in 1500 coef =.04305199, (robust) se =.11347758, t =.38 Oded Galor Roots of Comparative Development Lecture III - AEA 2014 34 / 41
Geographical Factors Persistent: Institutions & Human Diversity Population Density in 1500 & Income per Capita in 2005 Ex-Colonies Sample Log Income per Capita in 2005 2 0 2 4 CAN AUS USA NZL CHL MEX ARG URY BRA BWA GAB VEN ZAF MYS CRI PAN BLZ NAM DZA COLDOM PER SLVECU TUN SWZ GTM MAR AGO COG PRY HND GUY NIC PHL EGY IDN LKA BOL CMR CIV NGA LSOMRT SEN TCDZMB SDN VNM IND PAK MLI ZWE HTILAO KEN BEN GHA MOZ CAF TZA BFA GMB TGO BGD NER MDG GIN SLE UGA NPL RWA MWI ETH BDI 4 2 0 2 4 Log Population Density in 1500 coef =.54395783, (robust) se =.07224269, t = 7.53 Oded Galor Roots of Comparative Development Lecture III - AEA 2014 35 / 41
Geographical Factors Persistent: Institutions & Human Diversity Reversal of Fortune This reversal in the relative performance of countries is: Absent in the world sample Present in the former colonies sample = Reversal of Fortune is largely triggered by colonialism (Engerman- Sokoloff, 1997; Acemoglu et al., AER 2001, QJE 2002) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 36 / 41
Geographical Factors Persistent: Institutions & Human Diversity Origins of Reversal of Fortune among Ex-Colonies Persistent effect of institutions implemented by colonial powers (Engerman-Sokoloff, 1997; Acemoglu et al., AER 2001, QJE 2002) Exclusive (growth retarding) institutions imposed in densely populated areas Inclusive (growth enhancing) institutions implemented in sparsely populated areas Persistent effect of the human capital and diversity brought by the colonists Larger effect of colonizers in sparsely populated areas (Glaeser et al., JEG 2004; Easterly-Levine, 2012; Ashraf-Galor, 2014) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 37 / 41
Geographical Factors Persistent: Institutions & Human Diversity Population Density in 1500 & Subsequent Changes in Genetic Diversity Oded Galor Roots of Comparative Development Lecture III - AEA 2014 38 / 41
Geographical Factors Persistence Effect of Geography Persistent Effects of Some Geographical Factors Disease environment Persistent effect on labor productivity & investment in human capital (Gallup-Sachs, 2001; Andersen-Dalgaard-Selaya, 2012) Geographical isolation Reduced trade and technological diffusion (Gallup-Mellinger-Sachs, 1999) Persistence of culture conducive for innovations (Ashraf-Galor-Ozak, JEEA 2010) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 39 / 41
Geographical Factors Persistence Effect of Geography Persistent Effects of Geographical Factors Land suitable for large plantations Inequality: Extractive institutions (Engerman-Sokoloff, 1997) Concentration of landownership: Suboptimal investment in public education (Galor-Moav-Vollrath, RES 2009) Soil quality conducive for agriculture Specialization in unskilled-intensive goods Reduces human capital formation & increases fertility & slows the transition to modern growth (Galor-Mountford, RES 2008) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 40 / 41
Geographical Factors Persistence Effect of Geography Persistent Effects of Geographical Factors Range of soil quality Emergence of geographical specific human capital = reduced mobility = ethnic fractionalization (Michalopoulos, AER 2012) Persistent effect of ethnic fractionalization (Easterly-Levine, QJE 1997) Ecological diversity & storable crops Emergence & persistence of state capacity (Fenske, JEEA 2014; Mayshar-Moav-Neeman, 2013) Geographical determinants of body size Determined fertility & income per capita in the Malthusian epoch and the timing of the take-off (Dalgaard-Strulik, 2013) Oded Galor Roots of Comparative Development Lecture III - AEA 2014 41 / 41