Wednesday, November 2, 2011

Geography and the economy

It's probably not exactly Earth-shattering to suggest that geography goes a long way toward determining economic prosperity--in fact, the "geography is destiny" theory is a leading candidate to explain why the United States enjoyed such an extended era of economic growth in the 19th and 20th centuries (well, there's also those who point to the contributions of slave labor, but that's a conversation for a different day).

Nevertheless, it's interesting to see the concept displayed so clearly on a map, as was done by a trio of economists who pioneered the concept of "GDP Density"--simply put, a measure of the intensity of economic activity in a given spot (h/t Econbrowser).

Landlocked and tropical nations seem to be at a very clear disadvantage as far as economic production is concerned (the same also goes for particularly cold regions--sorry Canada), with any number of suggested explanations (ease of transportation and prevalence of disease are the leading candidates). As is pointed out over at Econbrowser, this map bears striking similarities to satellite pictures of the Earth at night (clearly, there's some correlation between lights and economic activity--I know, it's shocking).

I think these sorts of maps are interesting, and that they cast doubt on the importance that we all like to place on systems and institutions. Is America great because of its democracy, its capitalism, its banking infrastructure (ha!), its education systems, or its innate work ethic? Or was America just lucky, its success due to a fluky accident of geographic history?

It's certainly a question worth wondering when you consider just how much of our economic prosperity (and, of course, or foreign policy) today is determined by the one product that we just don't have enough of here at home--oil. Geography may not completely determine our destiny, but it certainly plays a starring role.


No comments:

Post a Comment