Physical Geography and the History of Economic Development
Gordon C. McCord
School of Global Policy and Strategy
University of California-San Diego
Jeffrey D. Sachs
Columbia University and NBER
Abstract: The geographical patterns of income differences across the world have deep underpinnings. We emphasize that economic development is a complex process driven by economic, political, social, and biophysical forces. Some economists have argued that the patterns reflect mainly the historical footprint of colonial rule and political evolution, and that geography’s effects on development occurred exclusively through its effects on this historical institutional development. We suggest that economic development has also been shaped very importantly by the biophysical and geophysical characteristics of economies. Per capita incomes differ around the world in no small part because of sharp differences across regions in the natural resource base and physical geography, and by the amplification of those differences through the dynamics of saving and investment. We posit that the drivers of economic development include institutions, technology, and geography, and that none of these alone is sufficient to account for the diverse patterns of global growth. This paper discusses the role of physical geography in economic history, surveys relevant literature, presents new geographic variables for scholarly use, and documents empirical regularities suggesting an important role for geography in the distribution of economic activity around the world today.
JEL: O1, N1, R1.
Keywords: development, geography, economic history.