“Geographic factors cannot be responsible for differences in per capita income today!”
Critically examine this statement.
Geography, which are exogenous differences of environment, refers to a country’s latitude,
topography, proximity to navigable water, climatic factors and so forth (Rodrik, 2002).
There exist two prominent opposing schools of thought, the “endowments” view and the
“institutions” view, which emphasise that the primary driver of comparative development is
either geography or institutional arrangements respectively (Auer, 2013). From as early as the
1700s, well-renowned philosopher Montesquieu identifies a potential causal link between
climatic factors and institutional arrangements, perhaps illustrating the ability of geography to
intrinsically shape the factors that drive comparative development. This interaction between
different deep determinants of economic growth will form the backbone of this analysis.
Geography is widely considered to be a deep determinant of economic growth (Rodrik, 2002;
Bloch and Tang, 2004). The classical explanation on the economic importance of geography
arises from Diamond (1997), which emphasises the historical domestication of animals as a
key driver of agricultural innovation in facilitating transport and ploughing. This in turn was
pivotal in generating mass agricultural surplus and thus, spurring city development,
specialisation and population growth. Nevertheless, Diamond (1997) postulates that this was
conducive to differential rates of development due to pre-existing inequality in the
geographic distribution of domesticable species – thirteen out of the fourteen species that can
be domesticated have Eurasian ancestors and so this key innovation could not be utilised by
every nation. This inequality is further exhibited in the distribution of domesticable and
nutritious plants such as wheat, rice, corn, barley and sorghum - four out of these five crops
are indigenous to Eurasia. Thus, this hindered agricultural productivity in areas like Africa
1
, and South America, which lacked these crops. This exacerbated the difficulty of generating
agricultural surplus, which was crucial to the formation of more complex societies.
However, Mayshar et al. (2018) contends that the causal mechanism between agriculture and
complex societies arises from the type of crops, rather than agricultural productivity in and of
itself. Regions like New Guinea adopted mass agriculture at approximately the same time as
Egypt, but unlike Egypt, it was unable to promote sound institutions. Crops such as roots and
tubers are easily perishable while cereals require storage and are easier to appropriate,
inducing demand for a protection providing elite and resulting in the implementation of taxes.
This facilitated the creation of complex hierarchies that are conducive to higher levels of
economic growth in places like Egypt. Therefore, geography does matter but rather due to its
interaction with the institutional domain.
Furthermore, Diamond (1997) proposed the axis-orientation transmission hypothesis. This
postulates that, due to homogeneity in climatic conditions, agricultural technology has a
tendency to transmit across latitudes in an east to west axis manner rather than north to south.
Hence, this has benefitted Eurasia, with its predominantly east to west axis of orientation, in
contrast to the Americas and Australia. This helps to explain the higher agricultural
productivity in Eurasia and in turn boosted population growth, increasing the probability of
innovations occurring. Diamond (1997) argues that this contributed towards the earlier
economic development of Eurasia. On the other hand, Chira et al. (2023) discusses how
Eurasia isn’t significantly more ecologically homogeneous than other continents and
therefore, rebukes the idea that the axis-orientation transmission hypothesis can be used to
explain the earlier development of Eurasia. Additionally, Olsson and Paik (2020) depict how
2
Critically examine this statement.
Geography, which are exogenous differences of environment, refers to a country’s latitude,
topography, proximity to navigable water, climatic factors and so forth (Rodrik, 2002).
There exist two prominent opposing schools of thought, the “endowments” view and the
“institutions” view, which emphasise that the primary driver of comparative development is
either geography or institutional arrangements respectively (Auer, 2013). From as early as the
1700s, well-renowned philosopher Montesquieu identifies a potential causal link between
climatic factors and institutional arrangements, perhaps illustrating the ability of geography to
intrinsically shape the factors that drive comparative development. This interaction between
different deep determinants of economic growth will form the backbone of this analysis.
Geography is widely considered to be a deep determinant of economic growth (Rodrik, 2002;
Bloch and Tang, 2004). The classical explanation on the economic importance of geography
arises from Diamond (1997), which emphasises the historical domestication of animals as a
key driver of agricultural innovation in facilitating transport and ploughing. This in turn was
pivotal in generating mass agricultural surplus and thus, spurring city development,
specialisation and population growth. Nevertheless, Diamond (1997) postulates that this was
conducive to differential rates of development due to pre-existing inequality in the
geographic distribution of domesticable species – thirteen out of the fourteen species that can
be domesticated have Eurasian ancestors and so this key innovation could not be utilised by
every nation. This inequality is further exhibited in the distribution of domesticable and
nutritious plants such as wheat, rice, corn, barley and sorghum - four out of these five crops
are indigenous to Eurasia. Thus, this hindered agricultural productivity in areas like Africa
1
, and South America, which lacked these crops. This exacerbated the difficulty of generating
agricultural surplus, which was crucial to the formation of more complex societies.
However, Mayshar et al. (2018) contends that the causal mechanism between agriculture and
complex societies arises from the type of crops, rather than agricultural productivity in and of
itself. Regions like New Guinea adopted mass agriculture at approximately the same time as
Egypt, but unlike Egypt, it was unable to promote sound institutions. Crops such as roots and
tubers are easily perishable while cereals require storage and are easier to appropriate,
inducing demand for a protection providing elite and resulting in the implementation of taxes.
This facilitated the creation of complex hierarchies that are conducive to higher levels of
economic growth in places like Egypt. Therefore, geography does matter but rather due to its
interaction with the institutional domain.
Furthermore, Diamond (1997) proposed the axis-orientation transmission hypothesis. This
postulates that, due to homogeneity in climatic conditions, agricultural technology has a
tendency to transmit across latitudes in an east to west axis manner rather than north to south.
Hence, this has benefitted Eurasia, with its predominantly east to west axis of orientation, in
contrast to the Americas and Australia. This helps to explain the higher agricultural
productivity in Eurasia and in turn boosted population growth, increasing the probability of
innovations occurring. Diamond (1997) argues that this contributed towards the earlier
economic development of Eurasia. On the other hand, Chira et al. (2023) discusses how
Eurasia isn’t significantly more ecologically homogeneous than other continents and
therefore, rebukes the idea that the axis-orientation transmission hypothesis can be used to
explain the earlier development of Eurasia. Additionally, Olsson and Paik (2020) depict how
2
