Download - Far-Flung Europe: What is the Economic Impact of Geography? John Luke Gallup jlgallup@pdx
My Path to Geography
● Why are LDCs poor and often slow growing?● Geographically isolated● Tropical climate
My Path to Geography
● Why are LDCs poor and often slow growing?● Geographically isolated● Tropical climate
● Outermost Regions● Geographically isolated● Tropical climate (for French regions)● European institutions and investment
Cross-Country Evidence
● Geographical isolation Access to sea-born trade Not distance per se
● Tropical Climate Disease, especially malaria Low agricultural productivity, especially for staples
Robust Correlates of Growth
1 East Asian dummy2 Initial primary schooling3 Investment price4 Initial GDP per person5 % Land area tropical6 % Population near coast7 Initial falciparum m alaria prevalence8 Initial life expectancy
Sala-I-M artin e t a l. "D eterm inants o f Long-R un G row th," AER 9/2004.
GD P p er person , P o rtu ga l, M ad e ira , and th e Azo res
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
1980 1985 1990 1995 2000 2005
GD
P p
er p
erso
n i
n 1
995
Eu
ros
P ORTUGA L M adeira A zores Norte
GD P p er person , S p a in and the C anary Is lan d s
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
1980 1985 1990 1995 2000 2005
GD
P p
er p
erso
n in
199
5 E
uros
S P A IN Canaries E x trem adura
GD P p er p erso n , F ran ce an d Overseas D ep artmen ts
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
1980 1985 1990 1995 2000 2005
GD
P p
er p
erso
n i
n 1
995
Eu
ros
FRA NCE M artinique Guadeloupe Reunion Guyane Cors ica
Canaries
Guadeloupe
Martinique
Guyane
Reunion
Azores
Madeira
Canaries
Guadeloupe
Martinique
Guyane
Reunion
Azores
Madeira
-10
12
34
5
5K 10K 20K 30K40K 5K 10K 20K 30K40K 5K 10K 20K 30K40K
Continental Ultra-periphery TotalG
DP
p.p
. Gro
wth
198
0-20
03 (
%)
GDP per person, 1980 (1995 Euros)
Tropical problems?
● Not agriculture● Outermost regions are not growing staples● All have volcanic soils except French Guiana● Agriculture <= 4% of output (except for Azores, 10%)
● Health● Not substantial mortality and morbidity due to tropical
disease● All malaria-free except for French Guiana
● There is no geography problem to explain for the economies of Outermost Regions
Infant Mortality as a Percentage of the National
Average
147 147 149
181 179
295
131
0
50
100
150
200
250
300
Azore
s
Made ira
Ca naries
Gua delou pe
Marti
niqu e
French
Gu ia na
Reunion
% o
f N
atio
nal
In fec tio u s an d P aras itic D isease M o rta lityas a P ercen tag e o f Natio n a l Averag e
60%82%
95%116%
149%
187%
66%
0%
100%
200%
-23%-29%
-36%-29%
-43%
-22%
-45%
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
D o cto rs p er P erso n C o mp ared to Natio n a l Averag e
66%
92%
20%
-22% -18%
-44%-54%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
A zores Canaries M artinique Reunion
Hosp ita l B eds per P ersonC omp ared to Natio na l Average
Manufacturing● Depressed by transportation costs
Manufacturing is about 15% of national output It is less than half that level in Outermost Regions A very small part of economy
Comparative Advantage
● Tourism● Services tied to networks beyond regions
Capture benefits of globalization Depends on
● Participation in networks● Education levels
Education in Outermost Regions
● Highschool dropout rates Worst (or close to) of all regions of countries Guadeloupe is exception: at national average French Guiana and Azores are each worst in
country by large margin● Enrollment of 17 y.o.'s 10% lower than any other region
T e rtiary E n ro llme n t R ate : R atio o f R e g io n al to N atio n al
40%
30%
80%
50%
60%
30%
60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
A z ores Madeira Canar ies Guadeloupe Martin ique Frenc h Guiana Reunion