Geography and Economic Development

Geography and Economic Development

March 1999 | John Luke Gallup and Jeffrey D. Sachs, with Andrew Mellinger
This paper explores the complex relationship between geography and macroeconomic growth, investigating how geographical factors directly impact growth while controlling for economic policies and institutions. The authors find that location and climate significantly influence income levels and growth through their effects on transport costs, disease burdens, and agricultural productivity. Geographical factors also play a role in shaping economic policy choices. Regions with high population density and rapid population increase, often located far from the coast or in tropical regions, face significant challenges in economic development. The paper highlights the importance of coastal economies and their access to international trade, as well as the disadvantages faced by landlocked and inland regions. It concludes that geography continues to be a crucial factor in economic development, alongside economic and political institutions, and calls for a re-introduction of geographical considerations into cross-country economic growth studies.This paper explores the complex relationship between geography and macroeconomic growth, investigating how geographical factors directly impact growth while controlling for economic policies and institutions. The authors find that location and climate significantly influence income levels and growth through their effects on transport costs, disease burdens, and agricultural productivity. Geographical factors also play a role in shaping economic policy choices. Regions with high population density and rapid population increase, often located far from the coast or in tropical regions, face significant challenges in economic development. The paper highlights the importance of coastal economies and their access to international trade, as well as the disadvantages faced by landlocked and inland regions. It concludes that geography continues to be a crucial factor in economic development, alongside economic and political institutions, and calls for a re-introduction of geographical considerations into cross-country economic growth studies.
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