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Econ 186

Issues in growth and development exam 2

Developed countries specific continents North America, Europe, Oceania and East/South East Asia.
Most developed countries are in Temperate Climates
Countries in geographic tropics are nearly all poor (exceptions are Hong Kong and Singapore)
The temperate climate zone extends from the tropic of cancer to the Arctic Circle (66.5 degree north) latitude in the N. hemisphere to the tropic of Capricorn (23.5 degree s. latitude) to the Antarctic Circle (66.5 degree south) latitude in the S. Hemisphere.
Coastal Economies are generally higher income than landlocked economies
Why are Europe’s landlocked countries special Europe is very well connected by low-cost trade, especially land trade, making mainland European economies very well integrated with one another.
Geographical regions not favorable to economic development or growth are found have high population density and rapid population increase
Tropical regions are hindered in development relative to temperate regions, probably because of higher disease burdens (example: malaria) and limitations on agricultural productivity (unfavorable climate and limited availability of water to work with).
Coastal regions and regions linked to coasts by ocean-navigable waterways are strongly favored in development relative to the hinterlands.
Landlocked economies may be particularly disadvantaged by their lack of access to sea, even when they are no farther than the interior parts of coastal economies, for at least three reasons: Cross-border migration of labor difficult than internal migration, infrastructure across national borders are more difficult than within a country, and Coastal economies may have military or econ incentives to impose costs on interior landlocked economies
The nature of geographical advantage has changed over time (agricultural productivity was more important in ancient times, access to markets and trade more important now).
High population density seems to be favorable for economic development in coastal regions. Economies with high population density in the surrounding area are the most disadvantaged.
The evidence shows that human populations are growing most rapidly in countries least equipped to experience rapid economic growth
The Direct Role of Geography on Economic Development and Growth: Transport Costs, Human Health, Agricultural productivity, and closeness and ownership of natural resources.
Transport costs: A coastal location or proximity to core economic centers reduces transport costs, and makes regions more accessible to one another.
Human health many diseases that are carried by mosquitoes (example: malaria, dengue, yellow fever etc), mollusks or other arthropods are endemic in the tropical ecological zones and nearly absent elsewhere.
Agricultural Productivity: Tropical Agriculture is 30-50 % less productive than temperate-zone agriculture, after controlling for factor inputs. A plausible reason is the hot climate in the tropics that kills agricultural crops and dries up rivers and other water sources
Proximity and Ownership of Natural Resources: Endowments of high-value natural resources (example: gasoline, natural gas, minerals, precious gems) increases income per capita of a country. In tropical countries, natural resources are limited and their ownership is often not well defined.
Indirect Roles of Geography on Economic Development and Growth good market access, in coastal regions and regions that are close to core economic centers, high population density is associated with higher economic development,
Good market access: may choose more open trade policies and trade more than countries that are distant from markets. Adopting more open trade policies would go hand in hand with economic development.
In coastal regions and regions that are close to core economic centers, high population density is associated with higher economic development In regions which are interior, landlocked or away from core economic centers, high population density is associated with lower economic development. So geography is associated with economic development through population density.
Main Findings of Gallup, Sachs and Mellinger: Location and climate have large direct effects on income levels and income growth. Geography has important effects on economic policies as well as population density and population growth. So the indirect channels are likely to be operative as well.
Geographic disadvantages of Africa Majority of Africa has a tropical location; Africa has the highest proportion of landlocked population of any continent in the world
More geographic disadvantages of Africa in countries with coastlines (example: Kenya, Sudan or Tanzania), populations are heavily in the African interior regions are not accessible by ocean-navigable vessels, since almost all river systems in Africa face impassable barriers.
Even more geographic disadvantages of Africa Severe malaria and many other similar vector-borne diseases are heavily concentrated in sub-Saharan Africa
North Korea is a temperate zone, coastal country (geographically favored) But it has failed to thrive under a socialist economic and political system.
Development seems to be favored among temperate zone economies in the Northern Hemisphere (Australia, New Zealand are exceptions) (Some European nations like Austria, Slovakia, Switzerland, Czech Republic are exceptions), that have avoided socialism and being ravaged by wars.
Tropical Underdevelopment by Jeffrey D. Sachs. The tropics are less developed than the temperate regions of the world.
Climate and ecology have adversely affected the development process in the tropics through the following channels: Technologies in critical areas like health and agriculture are ecologically specific, Technology in the tropics in two key areas, agriculture and health, have long lagged behind temperate zone technology,
Climate and ecology have adversely affected the development process in the tropics through the following channels part 2 Temperate-zone technologies are not suitable in a tropical context, given the ecological and historical differences between tropical and temperate zones, the tropic’s inability to mobilize energy resources
Climate and ecology have adversely affected the development process in the tropics through the following channels part 3 The initial income gap is amplified through economic, demographic and political-military forces. Temperate economies, due to their geographic advantages, are able to achieve that while the tropical economies are not.
Urbanization and Demographic Transition (moving from high birth and death rates to low birth and death rates) help economic development, and the tropics have lagged behind the temperate-zone economies.
Geopolitical factors are important: Temperate-zone military domination (colonialism) Rich-country (temperate zone) control of institutions of globalization. A Vicious circle continues of underdevelopment for tropical countries
Ecological factors affecting agricultural productivity in the tropics: Soil formation and erosion, Pests and parasites, Plant respiration and water availability and water control.
Soil formation and erosion tropical soils are very fragile and they lose their fertility after a few growing seasons. In temperate zones, on the other hand, the annual winter frost results in build-ups of deeper and richer top-soils over time.
Pests and parasites: High prevalence of crop pests and parasites in tropical ecosystems. Absence of freezing winter months to kill parasites and pests.
Plant respiration: Lower crop yields in tropics because plants respire more in warmer climates, especially in warmer nights.
Water availability and water control: High temperatures in the tropics mean that evaporation of surface water is very rapid. This is a huge problem in arid tropics.
Ecological factors affecting health in the tropics Higher disease burden, lower life expectancy and higher infant mortality rates in the tropics.
Differences in Energy Endowments across the tropics and temperate-climate zones: Coal deposits are overwhelmingly concentrated in the temperate zone. (9 out of 10 countries that accounted for 90.2% of global coal in 1998 were in the temperate zone). 82.5 % of production of hydrocarbons (oil and gas) in non-tropical countries in 1995.
How can the tropical economies emerge out of the vicious circle of underdevelopment? There should be concerted national and international focus on technological innovation to develop health and agricultural technologies and address energy needs specific to the tropical economies.
IKEA: Lower or middle income countries (the emerging income countries) they will also forge forward economically if We invest in the right green technology, so that we can avoid severe climate change, and energy can still be relatively cheap.
How will the poorest billion’s catch up with the emerging economies? And decrease population growth? Only if the poorest get out of poverty, they get education, they get improved child survival, and then population growth will stop in 2050.
How has Geography affected the world in accordance to crops and vegetation? The Fertile Crescent crops spread at the east west latitude of Eurasia, the same axis of latitude. Any two points of the globe that share the same latitude automatically share the same length of day and they often share a similar climate in vegetation
People around the world are fundamentally intelligent. With the example of New Guinea, it wasn’t for lack of ingenuity it was geographic disadvantages.
If the Maya had writing why didn’t spread south to the Andes to help the Inca become literate. – The shape of the continents-Eurasia stretched out from east to west and narrow from north to south. American continent is long to north and south and narrow to east to west (continents are of the same lengths Americans 8,000 miles from north to south.
American continents are the opposite of the Eurasia continent because A journey from one end of the Americas to the other is journey from North to the South, A journey through different day lengths, different climate zones and different vegetation.
basic differences in America's hindered the spread of crops and animals, as well as people ideas and technologies. The people of the Andes were chronically isolated.
Why the natives of the Andes infected by diseases and the conquistadors were not Genetic Resistance, the protection the Incas never had.
Why did the Incas never pass on diseases to the conquistadors- They didn’t have the same history of contact with farm animals as the Spaniards / Europeans. The only large farm animals the Inca had was the lama. All the large farm animals were native to Eurasia and North Africa. (Exception: Lama) which led to diseases
Why did the European settlers struggle in settling Africa? The understanding of geography, European crops had grown well in the cape, because the cape was a mirror of the European world lying on similar latitude.
Other Reasons European settlers struggled in settling Africa As the settlers progressed to the African interior they’d been moving north to the tropic of Capricorn entering into the tropic regions. Instead of the four seasons the tropics had only the dry season and the wet season.
How did the tribes of Africa succeed were the Europeans failed? Africans developed a unique tropical system of agriculture that had spread across the continent and become the foundation of complex societies trading as far as India.
How did the Europeans succumb to diseases such as smallpox and not affect the Africans? The Reason was the Indigenous germs to which the Europeans not have exposure to. Tropical germs: Small pox traveled from cattle to man. Native Africans developed antibodies from diseases like malaria
The immunities that Africans had once relied on are failing due to mutation of the diseases
Malaysia and Singapore are examples of tropical countries like Africa that through concerted effort adapted to tropic diseases and eradicated malaria from their lands by understanding their environment