Geography Matters Even if it Doesn’t

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Acemoglu and Robinson have been running a series of posts on the work of James Scott. Their latest regards the role of geography versus institutions.

Their post is an explanation for why the dispersion of population away from navigable rivers and coasts in Africa and Asia is likely the result of state formation. They cite James Scott pointing out that creating distance from the center/hub of the state is one effective, final way of limiting the influence that state can have on you. So the geographic dispersion we see in these continents may be a response to the centralizing efforts of early states (or colonizers).

And that is all well and good. It certainly seems like a plausible idea to explain geographic dispersion. What I do not understand is why this somehow shows that geography does not matter for development. The fact that the geographic dispersion of the population in Africa and Asia has some origin in the politics of state formation doesn’t mean that this dispersion is somehow meaningless for development.

They explicitly cite the Gallup, Sachs, and Mellinger paper that proposes (among other things) this dispersion as a source of under-development. Rivers and coasts make trade less costly, and boosts incomes. By living far from these places – and in having fewer navigable rivers to begin with – Africa and Asia have relatively high trade costs and hence lower development. How is that invalidated by the idea that the population is dispersed because of a need to escape authority? Short answer, it’s not. The fact that they can explain why a geographic disadvantage arose does not mean that it is not a disadvantage.

Being able to back up one step in history is wonderful for our understanding of economic development, but it does not prove anything. We can do some infinite regress where we bounce back and forth from institutions to geography: populations are disperse because of state formation, state formation was centered around high productivity agricultural areas, high productivity agriculture was due to innovations made possible by property rights, property rights only arise in places with land worth owning because of its fertility, etc. etc.. None of those steps imply that geography or institutions is better at explaining economic development.

Which is why I don’t understand the tendency of the Acemoglu and Robinson body of work to insist that institutions matter to the exclusion of all other factors. Yes, institutions (so broadly defined as to capture really anything you like) seem really important. But they are not the exclusive determinant of relative development, are they? Should I literally think that the poor agricultural land, lack of accessible waterways, and absence of valuable commodities in Ethiopia are meaningless to that country’s poverty? I don’t think so. The fact that improving institutions in Ethiopia would make it wealthier does not imply that it’s geography has not been a drag on its development.

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14 thoughts on “Geography Matters Even if it Doesn’t

  1. For the U.S., I think institutions matter because of the default conditions they (sometimes) impose on geographic characteristics. For instance, I encountered a ten dollar watermelon for the first time at the local grocery store. For the most part that is due to extreme droughts in the country. As a market monetarist, I can certainly say it wasn’t caused by the Fed. But it is also due to water rights being sold to cities away from rural properties which relied on water. Drought conditions are now exacerbated, by the fact that too many of our institutions have routinely removed the right for people to utilize water in their environments in more sustainable ways. Buckminster Fuller, when he was alive, wanted hi tech options to ordinary indoor plumbing. If only he could have gotten them.

  2. Botswana. Actual. Good Institutions and good resources gives wealth.
    Botswana. Supposed. Bad Institutions and good resources gives no wealth.
    Botswana. Supposed. Good institutions and poor resources is better than poor institutions and poor resources.
    What all the above means is that good institutions do help but good institutions and good resources are the best combination. Good institutions without good resources leaves a serious problem of relative development compared to a country with good resources and good institutions.
    If they were neighbours then the country with good institutions and poor resources would buy its food from the neighbour with the same good institutions and better geography. That means the former would be relatively poorer due to geography as the institutions are, theoretically, equally good.

  3. I agree. But it is worth noticing that the A&R plus Scott analysis does suggest that “growth” may not always be the goal. If growth and institutions are two sides of the same coin and I move to the country to avoid institutions, then it follows that I’m not interested in the growth you’re selling.

    If you get right with empirical history of humans you realize that “growth” is the solution to a specific problem, namely, “how do I feed all these kids?” When the world was less crowded and growth was not needed humans lived happy, long lives. That went on for tens of thousands of years before we had to resort to eating grain (carbs: cheap and deadly).

    • Growth may not be the goal, sure. But for A&R, the end goal is to explain why some countries are rich and some are poor, so that is the question they are trying to answer.

      But the idea that humans lived long, happy lives tens of thousands of years ago is complete crap. Life expectancies were short, and you were far more likely to die violently than from old age. There was nothing magical or wonderful about it. iPhones, antibiotics, airplanes, toilets, windows, eyeglasses, Diet Coke, pancakes, big-screen TV’s, and all the other accoutrements of modern life are way, way, way better than living in a cave eating week-old mammoth off the bone, hoping that Grog doesn’t sneak up and beat you to death so he can eat the mammoth instead.

      • I’m afraid you are wrong on the facts (http://www.anth.ucsb.edu/faculty/gurven/papers/GurvenKaplan2007pdr.pdf):

        A fundamental conclusion we draw from this analysis is that extensive longevity
        appears to be a novel feature of Homo sapiens. Our results contradict
        Vallois’s (1961: 222) claim that among early humans, “few individuals passed
        forty years, and it is only quite exceptionally that any passed fifty,” and the
        more traditional Hobbesian view of a nasty, brutish, and short human life (see
        also King and Jukes 1969; Weiss 1981). The data show that modal adult life
        span is 68–78 years, and that it was not uncommon for individuals to reach
        these ages, suggesting that inferences based on paleodemographic reconstruction
        are unreliable. One recent study that avoids several common problems
        of skeletal aging used dental-wear seriation and relative macro-age categories
        (ratio of old to young) to demonstrate an increase in the relative presence
        of older adults from australopithecines to early Homo and, more strikingly,
        among Upper Paleolithic humans (Caspari and Lee 2004; but see Hawkes and
        O’Connell 2005). More compellingly, a recent re-estimation of several common
        paleo-mortality curves based on hazard analysis and maximum likelihood
        methods shows a life course pattern similar to that of our ethnographic
        sample (Konigsberg and Herrmann 2006).

      • Ps. It might help you to hear me if I tell you that I am pro-growth and pro-development! I might enjoy going back in time, but that’s not an option.

      • I hear you. My response was overly snarky relative to what you were saying.

        And I don’t dispute any of the facts you cite – in particular in the Gurven/Kaplan article. What I will dispute is your interpretation of them, and that they indicate pre-historic humans lived long and happy lives. But this is such a good topic, and I want to be thorough in explaining myself, that I’m going to write this up as it’s own post in the next day or two. Stay tuned!

  4. Pingback: Solitary, Poor, Nasty, Brutish, Short…and Happy? | The Growth Economics Blog

  5. Iceland is an example of a country/region colonized purely to get away from a state (in this case the King of Norway).

    The provinces to the west and to the east of Tokyo is an example of regions where initial agricultural advantages (the fertility of the western province) was overcome by the geographical advantages of the eastern province once the center (in this case Edo) was developed enough to offer huge advantages to the farmers of the eastern province due to ease of accessibility to markets.

    It seems daft to assume an either/or stance regarding this question/problem.

    • That’s my biggest point – not that institutions don’t matter, but that they are surely not the *only* thing that matters.

  6. You can put geography far aside because policy implications inspired by the geographical hypothesis likely distort development priorities.

    Solving geographical problems is neither free nor sustainable. Many societies living in good geographical conditions remain underdeveloped. And if some international agency starts fixing the environment in Africa, it may create technologically better conditions for the local population at the expense of more distortions in local governance. Simple strategies weaken incentives to build a stronger or more inclusive government. After all, money and technologies come from elsewhere.

    The institutional hypothesis points at what you should create at home to solve other problems, like malaria or droughts. And if geo solutions still take place, they are better to be constructed from the institutional perspective.

    • Anton – not sure why I would “put geography aside” necessarily. To me, geography essentially changes relative prices. And if you are trying to actively promote development, then you are actively promoting changes in relative prices (i.e. making education cheaper, or health cheaper, etc..). Geography may make some of those prices less elastic than others.

      • People can take geography into account when they make decisions. Governments naturally have to do the same. And handling geography is important, but rather straightforward—hard technologies do that. But if humans don’t apply these (well known) technologies, then why do we question geography? I’m not sure that geography makes building wells in villages impossible for the locals, so international agencies have to do that.

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