International Development

Transcription

1 International Development L. Pascali University of Warwick July 2016

2 Introduction Wealth (Year 1500)

3 Wealth (Year 1990) Introduction

4 Introduction Vast differences in prosperity across countries today. Why? Income per capita in sub-saharan Africa on average 1/20th of U.S. income per capita In Mali, Democratic Republic of the Congo (Zaire), and Ethiopia, 1/35th of U.S. income per capita. Standard answers (SOLOW MODEL) Physical capital differences (poor countries don t save enough) Human capital differences (poor countries don t invest enough in education and skills) Technology differences (poor countries don t invest enough in R&D and technology adoption, and don t organize their production effi ciently)

5 Introduction These are, however, proximate causes of differences in prosperity. Why do some countries invest less in physical and human capital? Why do some countries fail to adopt new technologies and to organize production effi ciency? The answer to these questions is related to the fundamental causes of differences in prosperity. Potential fundamental causes: Geography (exogenous differences of environment) Institutions (humanly-devised rules shaping incentives) Culture (differences in beliefs, attitudes and preferences)

6 .. GEOGRAPHY

7 .. INSTITUTIONS

8 .. CULTURE

9 .. TRADE

10 Geography hypothesis: Jared Diamond "Two centuries ago, all New Guineans were still living in the Stone Age" Then.. "whites had arrived, imposed centralized government and brought manufactured good (cargo)" "Why is it that you white people developed so much cargo and brought it to New Guinea, but we black people had little cargo of our own?"

11 Geography hypothesis: Jared Diamond

12 Geography hypothesis: Jared Diamond Although agriculture arose in several parts of the world, Eurasia gained an early advantage due to the greater availability of suitable plant and animal species for domestication. easier to spread domesticated plant and animal species Control of crops and livestock leads to food surpluses. Surplus frees people up to specialize in activities other than sustenance and supports population growth. The combination of specialization and population growth leads: to the accumulation of social and technological innovations to develop immunity to a wide range of pathogens

13 The Neolithic revolution Nine homelands of food production (in dark). Starting from the Fertile Crescent in 8500 BC

14 The Neolithic revolution Why "farm"? Ex-post not a wise decision (it resulted in more works, lower adult stature, worse nutritional conditions, diseases, wars) Increasingly unpredictable climate and population density -> Broaden diets People transported some wild plants (cereals) from their natural habitats to more productive habitats and began cultivation Changes of the wild species under domestication

15 The Neolithic revolution An occasional single gene mutation that prevents shattering is lethal in the wild..but conveniently concentrate the seed for human gathers Once people started harvesting those wild cereals bringing them back to camp and replanting the seeds, the non-shattering mutation started to spread. Only 100 of the 200,000 wild species of higher plants were domesticated. Oak vs Almond. In the wild, acorns of oaks and almonds contain some poison. Occasionally, non-poison individuals arise The non-poison condition is controlled by a single dominant gene in almonds, but is polygenically in oaks, Conclusion: we are not able to domesticate oaks.

16 The Neolithic revolution

17 The Neolithic revolution Food production gave to farmers enormous demographic, technological, political and military advances. What were the characteristics of the first centres of agriculture? Not particularly fertile However, they were those regions to which the most numerous and valuable domesticable wild plants and species were native.

18 Domestication of animals Domestication animal is defined as an animal selectively bred in captivity and thereby modified from its wild ancestors.

19 Domestication of animals The importance of domesticated mammals rests on very few species of big terrestrial herbivores 148 wild species weighting 45 Kg or more Only 14 actually domesticated Why so few species were domesticated? Zebras vs horses (European horse breeders in South Africa in 19th century)

20 Domestication of animals Main obstacles to domestication: Diet (anteater) Slow growth rate Long birth spacing (gorilla and elephants) Reluctance to breed in captivity (pandas) lack of dominance hierarchies (antelope) panic in enclosure (gazelles)

21 Domestication of animals

22 Domestication of animals Eurasia was the main site of big mammal domestication

23 Why Eurasia? Domestication of animals More candidates than Africa Big mammals in the Americas and Australia became extinct 13,000 years ago

24 Domestication of animals Big mammals in the Americas and Australia became extinct 13,000 years ago This is probably related with human colonization of these territories Spread of human race from Africa.

25 Domestication of animals Domestic animals are crucial for development: Meat and milk products Fertilizer Land transport Leather Military advantages Plow traction Germs

26 Consequences of domestication Human population explosion Sedentary lifestyle permitted shorter birth intervals (nomadic mothers cannot carry more than one baby infant) Domesticated plant and animal species increase between 10 and 100 times the calories produced by 1 hectare of land Social stratification Storable food surpluses implied the rise of social stratification and more complex institutions Explosion of technology Nomadic people cannot carry forges Adoption of writing (serves the needs of the political institutions) Immunization from epidemic diseases "Crowd disease" sustain themselves only in dense population Were brought by domesticated animals (influenza from pigs) Exposed population evolved genetic resistance

27 The spread of agriculture and domesticated animals From the homelands of domestication, food production spread around the world: Hunter-gatherers acquire crops outside their homelands and settle as farmers (very few cases) Hunter-gatherers are overrun and replaced by farmers expanding outside of their homeland Bantu-speaking farmers expansion in Africa Fertile Crescent farmers over Europe Korean farmers over Japan

28 The spread of agriculture and domesticated animals

29

30 The spread of agriculture and domesticated animals

31 The spread of agriculture and domesticated animals The expansions of crops and livestock tended to occur more rapidly along east-west axes than along north-south axes. Locations at the same latitude share identical: day-lenghts and seasonalities habitats and diseases Require less evolutionary changes from domesticated species Eurasia s east-west axis resulted in a rapid enrichment of crops, livestock (and technologies).

32 The spread of agriculture and domesticated animals

33 The spread of agriculture and domesticated animals Speed of spread of food production: from Southwest Asia both west to Europe and east to the Hindus valley (0.7 miles per year) from Mexico northward to the US ( miles per year) Number of species that spread Most Southwest Asian crops and livestock did spread west to Europe and east to the Hindus valley Neither of the Andes domestic mammals (llama and guinea pig) ever reached Mesoamerica

34 Summing up Because of geographical reasons and biological endowments, some people acquired domesticates before than others. Domesticates implied advantages such as guns, germs and steel The history of the past years has consisted of farmers replacing hunter-gatherers. These agricultural expansions originated from nine homelands of agriculture. They remade the genetic and linguistic map of the world.

35 Geography hypothesis: Montesquieu The spirit of the laws The heat of the climate can be so excessive that the body there will be absolutely without strength. So, prostration will pass even to the spirit; no curiosity, no noble enterprise, no generous sentiment; inclinations will all be passive there; laziness there will be happiness, "People are... more vigorous in cold climates. The inhabitants of warm countries are, like old men, timorous; the people in cold countries are, like young men, brave". Moreover, Montesquieu argues that lazy people tend to be governed by despots, while vigorous people could be governed in democracies; thus hot climates are conducive to authoritarianism and despotism.

36 Geography hypothesis: Jeff Sachs Tropical vs Temperate and Landlocked countries "Economies in tropical ecozones are nearly everywhere poor, while those in temperate ecozones are generally rich" because "Certain parts of the world are geographically favored.." "The burden of infectious disease is higher in the tropics than in the temperate zones Tropics are also worse for diseases that affect plants and animals and not just human diseases. Some frost is good! (kills off parasites/worms and more than makes up for shorter growing season!) So what? Good health high productivity high income (and expect to live long) high savings high investment high productivity and better health! Poor health low life expectancy why invest in education/saving. Better have more kids (cos many will die in any case!)...

37 Geography hypothesis: Jeff Sachs Temperate vs Tropical

38 Geography hypothesis: Jeff Sachs Temperate vs Tropical

39 Geography hypothesis: Jeff Sachs Temperate vs Tropical

40 Geography hypothesis: Jeff Sachs The role of geographical isolation

41 Geography hypothesis: Jeff Sachs In a globalized world the disadvantages of adverse geography are magnified. Human and physical capital are more likely to emigrate. Geography or institutions? Globalization affected the developing world in the last 30 years in asymmetric ways. Favorable institutions and geography (Korea, costal China, Singapore, Malaysia..) Well endowed geographically but with poor institutions (Eastern European States) -> here institutional reforms are paramount Regions with unfavorable geography and institutions (like most Africa) -> trapped in poverty Policy implications: In Africa, improvements in institutions might not be suffi cient. Special investments are needed to fight endemic diseases (malaria) and to build infrastructure to break the geographical isolation

42 Geography hypothesis: Dell, Jones and Olken (2012) This paper uses historical fluctuations in temperature within countries to identify its effects on aggregate economic outcomes Construct temperature and precipitation data for each country and year in the world from 1950 to 2003 and combine this dataset with aggregate output

43 Geography hypothesis: Dell, Jones and Olken (2012)

44 Geography hypothesis: Dell, Jones and Olken (2012)

45 Geography hypothesis: Dell, Jones and Olken (2012)

46 Geography hypothesis: Dell, Jones and Olken (2012) Conclusions: Large negative effects of higher temperatures on growth, but only in poor countries They estimate that a 1C rise in temperature in a given year reduced economic growth in that year by about percentage points This is a gigantic effect! No effects in rich countries Potential large impacts of global warming