Economic Growth and Development

(singke) #1

  • The availability of natural resources are products of geography and may
    influence output directly (exporting oil) or indirectly (good soils boosting
    output from agriculture).

  • Many of the effects of geography are likely to impact through TFP, for
    example, poor soils and weather reducing the yield of land, loss of school-
    ing and work experience reducing the productivity of labour, more isolated
    domestic producers being less engaged with the competition and access to
    new ideas/technologies characteristic of international trade.

  • Geography can be defined as ‘those physical attributes tied to specific loca-
    tions’. They may be fixed such as latitude, distance from coastlines, alti-
    tude, access to navigable rivers, or slowly changing such as climate or
    agricultural potential (soil quality and rainfall). In statistical work they can
    be considered exogenous because they are not caused by economic and
    other social variables.

  • Adverse geography is linked to low levels of income and slow economic
    growth.

  • There are five major mechanisms through which geography can influence
    economic growth:transport costs,proximity to/ownership of natural
    resources,state formation, human health and agricultural productivity
    (including animal husbandry). The most important of these are transport
    costs,natural resources and human health.

  • The impact of geography on growth is likely to change in the future, for
    example, as improved communications technology reduces the penalty
    associated with being landlocked.

  • Infrastructure, foreign aid and technological change are the key ‘solutions’
    to deal with problems of geography.


Geography and Economic Resources 249
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