For questions, please contact Professor Raquel Fernandez- rf2@nyu.edu or Professor William Easterly- william.easterly@nyu.edu

Abstract:

Why do wealthy countries tend to be stable democracies? Why do high-income democracies cluster geographically? Why did these patterns only emerge over the past 200 years? We address these questions by advancing an ecological framework, in which an ecology is understood to be the physical environment and the social and institutional adaptations that human beings made in order to survive in it. We hypothesize that the social and institutional adaptations that societies made in order to mitigate the great challenge of insuring against starvation prior to 1800 conditioned their abilities to respond to the next great challenge they faced; adapting to the challenge posed by adapting the technologies of the modern world after 1800. We also hypothesize that how societies were able to insure against starvation prior to 1800 was conditioned by their local factor endowments related to food production, storage, and transport. It follows that a vector of factor endowments, conditional on the technologies of 1800, should explain variance in today’s levels of economic development and democratic consolidation. We find that 53 percent of the variance GDP per capita in 2014 is explained by a vector of seven factor endowments, and the percentage of variance increases to 62 percent once oil-intensive economies are accounted for. In addition, we find that 27 percent of the variance in economic growth since 1800 is accounted for by those factor endowments, and that the 30 percent of the level of democratic consolidation today is accounted for by those factor endowments. We also find that these results are robust to the addition of other variables that researchers have posited as causal factors in long-run economic growth.