NCPA - National Center for Policy Analysis

Study Shows Relationships Between Geography, Population And Economic Growth

July 28, 1999

A study shows that a country' s economic development, population, and economic policies are influenced by geography. It also offers an explanation for the large gap between rich and poor countries.

Researchers from Harvard University claim that a country's geography not only affects its economic growth potential, but also its population and economic policies. The authors focus on 150 countries with populations greater that one million, which accounts for 99.7 percent of the estimated 5.67 billion people of the world. They argue that researchers have neglected economic geography in the past, yet it is a crucial element in the understanding of a country's economic development.

For instance, almost all countries in the tropics are poor countries, while almost all countries situated in mid and high latitudes are rich. In addition, coastal economies are generally wealthier than landlocked ones. With the exception of European countries, there is not a single rich landlocked country in the world.

  • The average per capita income of tropical countries is $3,685, that of sub-tropical countries is $9,248, and in more temperate countries, it is $14,828.
  • Among non-European countries, the per capita income of coastal countries ($5,567) is over three times larger than that of landlocked ones ($1,771).

This is due to the fact that the fastest-growing developing countries rely on labor-intensive manufacturing exports, the production of which is concentrated in port cities.

Why are tropical countries at a disadvantage? The authors believe that a higher disease burden and lower agricultural productivity are to blame.

Source: John Luke Gallap, Jeffery D. Sachs and Andrew D. Mellinger, "Geography and Economic Development", Working Paper No. W6849, National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, Massachusetts 02138, (617) 868- 3900.


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