John Luke Gallup

Geography and Economic Development

Location and climate have large effects on income levels and income growth through their effects on transport costs, disease burdens, and agricultural productivity, among other channels. Geography also seems to affect economic policy choices. Many geographic regions that have not been conducive to modern economic growth have high population densities and are experiencing rapid increases in population. At particular disadvantage are regions located far from coasts and ocean-navigable rivers, for which the transport costs of international trade are high, and tropical regions, which bear a heavy burden of disease. Moreover, a large portion of population growth over the next thirty years is expected to occur in these geographically disadvantaged regions.

Agriculture, Climate, and Technology: Why Are the Tropics Falling Behind?

The tropics,sadly,continues to be a belt of poverty. The countries of the tropics all have low or middling incomes,with a few tiny or natural-resource-rich exceptions,and few of the poorest countries are outside of the tropics. The causes of tropical poverty are surely complex,involving initial endowments (Diamond),history,especially colonization, and geographical isolation (Gallup and Sachs 1999a). Central to the tropical poverty trap, though,is the impact of climate on productivity through the channels of tropical disease ecology and agriculture. This paper investigates the last channel: the causes of lower agricultural productivity in the tropics. The disparity in agricultural productivity between the tropics and the temperate zones is even greater than the disparity in income levels (figure 1). Income per capita in nontropical countries was 3.3 times the level of income per capita in tropical countries in 1995,but agricultural output per worker in the non-tropical countries was 8.8 times the level in the tropics. 1

The wage labor market and inequality in Viet Nam in the 1990s

Has the expansion of wage employment in Vietnam exacerbated social inequalities, despite its contribution to income growth? Gallup uses the two rounds of the Vietnamese Living Standards Survey (VLSS) to evaluate the contribution of wage employment to inequality and income growth over the period of rapid economic growth in the 1990s following market reforms. If Vietnam sustains its economic development in the future, wage employment will become an ever more important source of household income as family farms and self-employed household enterprises become less prevalent. Observing the recent evolution of wage employment compared with farm and non-farm self-employment provides clues as to how economic development will change Vietnamese society, in particular its impact on income inequality within and between communities. The author shows that standard methods for calculating income inequality can be severely biased due to measurement error when decomposing the contribution of different sectors, regions, or groups to overall inequality. A new method for consistent decomposition of inequality by income source shows that despite the rapid growth of wages in the 1990s, wage inequality fell modestly. Contrary to the results of uncorrected methods, wage employment contributes a roughly similar amount to overall income inequality as other nonagricultural employment (household enterprise and remittances, mainly). Agricultural income actually reduces overall income inequality because inequality between agricultural households is much lower than inequality between nonagricultural households, and agricultural income has a lower correlation with other income sources. Wage employment has not been the locus of growing disparity between the haves and the have-nots in Vietnam. A declining share of agriculture as the economy grows in Vietnam means that income inequality will rise, assuming that within-sector inequality does not change. This rising inequality, due to the shrinking share of agriculture, will be difficult to avoid without giving up economic growth and rapid poverty reduction in Vietnam. Historically, the process of economic development has always brought about a transition out of small farms and household enterprises into wage employment as worker productivity increases and non-household enterprises dominate the economy.

Is Geography Destiny?: Lessons from Latin America

The channels through which geography influences economic and social development can be studied at different levels and perspectives of time. Countries are the basic unit of observation, and some historical considerations notwithstanding, the horizon of analysis is limited to the past four or five decades. The objective is to establish to what extent geography is responsible for differences in development between countries, and more specifically between Latin America and other groups of countries. The economic and social development of Latin American countries has been and continues to be affected both by physical geography (climate and the characteristics of land and topography) and by human geography (settlement patterns of the population). The most significant channels of influence of geography are the productivity of the land, the presence of endemic diseases, natural disasters, the location of countries and their populations in relation to the coast, and the concentration of the population in urban areas. The first two chapters look backward to determine whether geography is one of the causes explaining the current development levels of Latin American countries and the regions within them. In contrast, chapter 3 looks ahead at what can be done. The answer to some geographical disadvantages can be more and better roads and communications, although some solutions may be beyond what some countries can do, especially those that are poorer because their geography is more adverse. But the range of possible solutions does not stop there. Most policy instruments that can influence the effects of geography are not new: regional or urban development policies, research and technology programs, or decentralization strategies. What is new is that these policies can better incorporate the various geographical variables that influence their effectiveness. Failure to incorporate those variables into policies translates into welfare losses for the poorest people in the Latin American countries.

Climate, Water Navigability, and Economic Development

Geographic information systems (GIS) data was used on a global scale to examine the relationship between climate (ecozones), water navigability, and economic development in terms of GDP per capita. GDP per capita and the spatial density of economic activity measured as GDP per km2 are high in temperate ecozones and in regions proximate to the sea (within 100 km of the ocean or a sea-navigable waterway). Temperate ecozones proximate to the sea account for 8 percent of the world’s inhabited land area, 23 percent of the world’s population, and 53 percent of the world’s GDP. The GDP densities in temperate ecozones proximate to the sea are on average eighteen times higher than in non-proximate non-temperate areas.