sixteenth century were often much higher in countries that are now ‘poor and
tropical’. The subsequent success of temperate agriculture is in large part due
to sustained efforts to expand production in developed countries. Between
1950 and 1990 annual labour productivity in developed-country agriculture
rose by 5.4 per cent but in developing countries (except China) by 1.3 per cent
(Skarstein, 2007:360); thanks to the massive subsidies, R&D and mechaniza-
tion, developed countries could focus on temperate agriculture.
Geography: impact and policy agenda
The most important geographical factors identified in this chapter were trans-
port costs, natural resources and health. As the impact of fixed geographical
factors on economic growth has changed in the past, so it is likely to do in the
future. There are a number of policy responses to geographical problems,
including shifting output towards manufacturing, reducing transport costs,
regional trade, aid and health care investment.
Braudel (1984:523) wrote that ‘if geography proposes, history disposes’.
Geography is not destiny and its effects can be mitigated or even overcome by
good economic policy. An important aspect of economic development has been
the shift from climate-sensitive farming towards climate-insensitive manufactur-
ing and services. In 1820 72 per cent of US employment was on farms and by
2004 this share was only 1.2 per cent. The four tropical countries that have expe-
rienced sustained growth – Mauritius,Hong Kong, Singapore and Taiwan – were
ab le to escape their geographical burden through export-led growth in textiles
and electronics. It is doubtful whether this lesson can be copied by all develop-
ing countries. Te xtiles and electronics tend to be heavily dependent on importing
inputs for assembly and subsequent export so are particularly vulnerable to the
high transport costs associated with being landlocked. Notably all those four
successful cases had easy coastal access. This problem could be partially over-
come in Sub-Saharan Africa by processing local raw materials rather than
importing inputs. Uganda, for example, could export roasted and branded coffee
ra ther than raw beans and Mali could process raw cotton into textiles.
There are also many policies that can reduce transport costs even for land-
locked countries. These include more efficient port facilities, duty-free access
to imported inputs and capital goods, timely customs administration, physical
security and reliability in warehousing, cost-effective access to international
telephone and internet services, reliable power supply, flexibility in hiring and
dismissing workers, and reasonable shipping costs to major ports in Europe,
US and Japan (Bloom et al.,1998). Geographical isolation is often policy
induced. Policies that give monopolies to official national carriers (often
airlines) have been adopted by many African governments but have increased
freight costs. Studies of other regions demonstrate that deregulation and other
pro-competition measures have reduced freight liner rates by as much as 50 per
cent (Amjadi and Yeats, 1995).
246 Patterns and Determinants of Economic Growth