can be extremely persistent (Guiso, Sapienza, and Zingales, 2006; Nunn, 2012). Second, cultural values interact with institutional development (Greif, 1994, 2006; Alesina and Giuliano, 2015; Bisin and Verdier, 2017).
In the penultimate chapter, we consider the “Great Convergence” between the many parts of the rest of the world and the West. One of the great stories of the last half-century is the billions of people pulled out of abject poverty. China has been a huge source of this economic progress, but so have many parts of South Asia, Southeast Asia, and Latin America. As we write this book, another half a billion or so people in India seem on the brink of escaping absolute poverty. In fact, the last twenty years have been characterized by faster economic growth in poor countries than in rich countries (Patel, Sandefur, and Subramanian, 2021). The time horizon might be a little longer for sub-Saharan Africa and the poorest countries in Latin America and Central Asia, but there is reason to be optimistic that we will experience a further dramatic eradication of poverty in those regions in our lifetime. All of this would be impossible without economic growth.
Just because we find some explanations for how the world became rich more compelling than others does not mean that the other theories have little merit. In fact, we believe there are important insights in all of the theories outlined in this book. In the end, we need to remember that an issue as wide-ranging as “how the world became rich” almost certainly has many causes. Intelligent people can and will disagree on what weight to put on each of these causes. What matters most is understanding the conditions under which certain causes are important and the conditions under which they are not. It is our hope that this book will provide a better understanding of these conditions.
What This Book Does Not Do
For all we are attempting to accomplish with this book, we want to be clear about a few things we will not do. First, our goal is to present all of the major arguments on “how the world got rich” in a fair-minded fashion. This means that, when initially presenting the theories, we will do our best to not let our own biases creep in. We certainly have views on the various issues presented in the book, and we do think that some views are more convincing than others. The later chapters of the book lay out the reasons we believe some of the proposed causes in the literature have greater explanatory power than others. However, we aim to give each of the main explanations a fair shake and present them, to the best of our ability, the way that the authors of the theories would want them presented.
This book is thematic and conceptual. We elucidate the major themes running through the academic literature and contextualize them in a digestible manner. As such, we won’t present a comprehensive economic history of specific countries. Such histories can be extremely valuable. In some cases, they shed light on important aspects of the origins of economic growth. We pay particular attention to developments in Great Britain in the 18th and 19th centuries. But this is simply due to the fact that we are seeking to understand the origins of modern, sustained growth, and Great Britain was the locus of the first modern economy. We also pay attention to places that failed to be the center of the first modern economy – despite a head start relative to Western Europe – such as China and the Middle East. We do not provide a deep dive into the specifics of the economic histories of these regions. Instead, we selectively choose various aspects of their histories to help substantiate theories espoused in the literature.
Finally, we do not spend much time discussing the drawbacks to economic growth such as pollution, climate change, and the capacity to create deadly weapons. We are by no means denying the importance of these topics, but these issues are simply outside the scope of this book. We have written a book on the origins of modern economic growth. While we believe economic growth in general to be a good thing, the focus here is on what caused economic growth, not its consequences.
2 Did Some Societies Win the Geography Lottery?
Does geography determine the fate of nations? Is the key to unlocking riches preordained by factors like climate, natural resources, soil quality, and access to the ocean? Geographic explanations have long been a favorite of thinkers looking for reasons why their society pulled ahead. According to the Muslim Andalusian thinker Abū al-Qāsim Sā’id (1068): “The exceeding distance [of Northern Europeans] from the sun thickens the air making their dispositions cold, their natures rude, their skin color white and their hair straight. Thus … dullness and ignorance overpower them” (quoted in Chaney, 2008, p. 2). On the other hand, in Book XIV of The Spirit of the Laws, the French philosopher Montesquieu made a similar argument but drew an opposite conclusion:
People are … more vigorous in cold climates…. The inhabitants of warm countries are, like old men, timorous; the people in cold countries are, like young men, brave. If we reflect on the late wars … we shall find that the northern people, transplanted into southern regions, did not perform such exploits as their countrymen who, fighting in their own climate, possessed their full vigor and courage. (Montesquieu, 1748/1989, p. 317)
Modern scholars have also argued that geography and climate play a crucial role in explaining patterns of economic development. Perhaps the most well-known insights are those of Diamond (1997), who argues that factors like the relative length of continental axis, the disease environment, proximity to the equator, and access to coasts and rivers had a tremendous influence on long-run economic prosperity. We discuss Diamond’s influential hypothesis in depth in this chapter.
But is geography fate? Are locations with “good” characteristics destined to be more developed? Davis and Weinstein’s (2002) seminal study of Japanese urban development in the aftermath of World War II provides evidence for the importance of geographic fundamentals. The authors examined what happened to the distribution of urban centers after the destruction of Hiroshima and Nagasaki by the atomic bomb. They show that after experiencing complete destruction, both Hiroshima and Nagasaki returned to the same relative positions in Japan’s distribution of cities within twenty years. This suggests that a major shock to the distribution of population was insufficient to overcome the intrinsic geographic advantages of these two locations. Whether such findings are generalizable is something we will discuss throughout the book.
What about the Industrial Revolution? Britain’s position as a large island off the coast of Europe, endowed with a moderate climate, numerous rivers, and a long coastline, helped shape the formation of its political institutions. Abundant coal resources played an important role in its early industrialization. It is worth asking: could this be why Britain industrialized first?
Geography and Modern Development
Geography matters for economic development today, especially in the poorest parts of the world. For instance, many countries in sub-Saharan Africa are landlocked, and most others have only a small amount of coast (see Figure 2.1). Without coastlines, they are unable to directly ship goods to other countries. They also have to rely on expensive and hard-to-maintain road and rail networks which can easily be blocked or cut off by their neighbors.
Figure 2.1 Coastlines of African countries
Coast length data from: CIA (2019).
Figure 2.2 Africa’s “malaria belt”
