NCPA - National Center for Policy Analysis

Temperate Climes More Prosperous

August 29, 2001

Why some countries are rich and others poor is a question that plagues economists, sociologists and others around the globe. Some suggest that the form of government affects wealth, while others argue that it is the natural resources of the country. A new study suggests that ecology explains the difference between rich and poor nations.

European culture cannot explain wealth because rich nations include eastern nations Japan, South Korea and Taiwan. Colonialism cannot explain poverty, because Latin America has been free for almost 200 years and is still quite poor. However, there is evidence that being situated in tropical zones (zones near the Equator) explains why some countries are poorer:

  • Only 2 of the 30 nations classified as rich by the World Bank are between the Tropics of Cancer and Capricorn.
  • Moreover, these nations are small, island nations: Singapore and Hong Kong.
  • Brazil, which spans a large amount of latitude, has poor regions in the tropical zone and richer regions in the temperate zones.
  • The per capita income in temperate zones is over 4 times that of tropical zones.

The study's authors believe that tropical zones suffer from several disadvantages:

  • They have less farm productivity due to poor soil, faster erosion, a greater number of pests and the inability to use technology designed for temperate zones.
  • Because there is no winter freeze, disease is far more rampant and deadly, more so because the people are undernourished.

Due to these disadvantages in food and health standards, the economies of tropical zones cannot develop very well. The only two exceptions, Hong Kong and Singapore, are cities where disease can be controlled and that do not rely on their own food production.

Source: "The World's Ecological Divide," Economic Intuition, Spring 2001; based on Jeffrey D. Sachs, NBER Working Paper w8119, February 2001, National Bureau of Economic Research.

For NBER text


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