Published by EH.NET (January 2005)
John Luke Gallup, Alejandro Gaviria and Eduardo Lora, Is Geography Destiny? Lessons from Latin America. Stanford: Stanford University Press (a co-publication with the Inter-American Development Bank), 2003. xiv + 171 pp. $21.95 (paperback), ISBN: 0-8213-5451-5.
Reviewed for EH.NET by Patrice Franko, Department of Economics, Colby College.
Although Is Geography Destiny? rejects a determinist view that geography controls growth in Latin American, it persuades the reader of the importance of geography in shaping the opportunities and constraints on economic change in the region. It is at once an obvious story — of course geography molds outcomes — and a provocative one — why hasn’t the growth literature historically paid more attention to the dramatic geographic characteristics shaping growth in the region? It is also an important policy piece. Growth strategies must more explicitly incorporate lessons of geography to address problems of poverty and inequality in Latin America.
The book proceeds in three parts. The first chapter analyzes the influence of geography on levels of economic and social development between countries. How have central geographic factors — the productivity of land, the presence of endemic disease, natural disasters, the location of populations and markets, particularly relative to the coast and urban settings — differentiated growth among Latin American countries and between the region and the rest of the world? The dramatic geographies of Patagonia, Machu Pichu, the Amazon and the Central American rainforests that make for sensational travel also create poverty when physical barriers cannot be overcome. Is Geography Destiny is rich in its description of the varied physical and human geographies of the region. The authors document that Latin American countries exhibit some of the highest degrees of geographic fragmentation in the world. That is, it is unlikely that two individuals drawn at random from the same population will live in the same ecozone. Their connection between geographical fragmentation, social cleavage and inequality make this an important conclusion for the design of poverty programs.
Geographical characteristics conditioned historical growth patterns. Highland populations in the Andes, Mexico or Central America isolated indigenous cultures from contact with European disease; such isolation also created minimal contact with emerging national markets and policies. Colonizers rejected the harsh conditions of the tropics where malaria and yellow fever wiped out occupying troops, steel quickly turned to rust, clothing never dried and furniture fell apart. Instead, they favored more temperate climates to establish colonial roots and implant stronger institutional frameworks, with the nontropical regions becoming the richest on the continent. Colonial settlement patterns were strongly correlated with less productive tropical land, leading to latitude as a strong predictor of GDP per capita in the 1800s.
The effects of poor land and frail institutions persist today. Even controlling for income, inhabitants of tropical latitudes can expect to live seven fewer years than those in desert or dry regions. Vulnerability to the physical environment increases death tolls during natural disasters, killing 227,000 people and costing the region between 700 million and 3.3 billion dollars over the past thirty years. It is estimated that less than four percent of damages in the region are insured, leaving a gaping hole in public and personal finances when a hurricane washes ashore or an earthquake rocks a densely concentrated city. Weak physical infrastructure in the face of geographical constraints acts as a tax on trade. Overland shipping across the continent can be as expensive as shipping goods half way around the world — adding to the explanation of why national integration, even under the incentives of import substitution industrialization, was historically compromised in Latin America. Instead, port cities, with huge concentrations of population and their associated problems of congestion and pollution, developed with an outward focus. A greater share of Latin Americans live in primary, mega cities than do people in other regions of the world. Geography has promoted unbalanced growth.
International competitiveness is conditioned by the geographical factors discussed in Is Geography Destiny. Health and human settlement patterns affect educational outcomes. Transportation challenges impact growth; the import substitution literature often lamented the lack of regional economies of scale — without facing head on the mountains, jungles or deserts as reasonable explanations for the failure of the model.
But how can we filter out the effect of geography from the simultaneous growth of institutions? How do we know that geography and not weak institutions caused suboptimal performance? The second part of Is Geography Destiny pushes the level of analysis to countries with geographically distinct regions within Latin America: Bolivia, Brazil, Colombia, Mexico and Peru. This country focus controls for the historical evolution of political institutions across countries, asking how, within the same framework, regional growth has responded to geographic constraints. The country studies presented in the book solidly link geographical condition with evolving institutions within and between countries and also highlight the strong degree of heterogeneity in response to geography across nations . The concluding section asks what can be done within the constraints of geography. The authors advocate a basic needs approach to infrastructure designed through a decentralized, participatory approach which incorporates market-based incentives. By ignoring hurricanes and earthquakes, endemic disease, urban infrastructure deficits and rural isolation, economic policy is made vulnerable to unexpected failure. Something must be done to provide greater resiliency in policymaking. The authors might be questioned, however, for assuming an uncritical stance toward global integration as the primary criterion for addressing geographical constraints. Their suggestion that access to international markets should be the primary criterion for investment in roads, ports, railways and markets should be carefully evaluated by policymakers for cultural and environmental impacts. The recent Asian tsunami has underscored the fragility of life in overpopulated areas vulnerable to natural disaster. In the Western Hemisphere, the Economic Commission for Latin America and the Caribbean documented $2.2 billion in losses due to the 2004 hurricane season in the Caribbean alone. As Is Geography Destiny accurately points out, the technological capabilities to reduce geographically-based vulnerability to extreme events is out of the reach of most Latin American nations. Achieving the United National Millennium Goal of reducing the number and effects of natural and man-made disasters will take strong cooperation and financing by the richer nations in the world. The argument for investment by both Latin American nations and the international community rests not only on the globalization of markets but also on the ethical argument of averting preventable tragedies brought on by geographic conditions. Is Geography Destiny makes an important contribution to our understanding of the underlying priorities for policy attention.
Patrice Franko is the Grossman Professor of Economics at Colby College in Waterville, Maine and is the author of The Puzzle of Latin American Economic Development, second edition (Lanham, MD: Rowman & Littlefield, 2003).