By Shreshtha Mishra
The correlation between the economic performance and latitude of an economy is quite startling. It has been found that countries near the equator tend to be poorer than countries which are further away. Thus, the wealth of a country is conjectured to be an increasing function of its distance from the equator. However, this is a new phenomenon. The rich Indian, Egyptian and Middle Eastern nations of the past suggest that this correlation did not exist throughout history.
Even now, it may not be true
Of course, like all connections, there are some exceptions. Countries like Malaysia, Thailand and Singapore are some of the richest nations in Southeast Asia. Panama and Costa Rica, which are near the equator, are among the richest countries in Central America. Thus, this correlation is not universal and there are deviations from the norm.
[su_pullquote align=”right”]This correlation is not universal and there are deviations from the norm.[/su_pullquote]
Further, it should be noted that the basic statistical rule that correlation does not imply causation applies here. There is no conclusive evidence to prove that being located near the equator causes a country to be poor. Correlation means that there exists a linear relationship between the two. All that we can conclude from the correlation is that both of these things tend to happen together.
Is causation possible?
Some people believe that hot climactic conditions raise the probability of the occurrence of diseases. This leads to increased spending on health care services. It also causes high infant mortality and so, lowers the productivity of workers. Cattle in tropical climates are also more vulnerable to diseases. Thus, the productivity of livestock in tropical climates is very low. This leads to low per capita income.
Diseases such as elephantiasis, are prevalent in tropical regions | Picture Courtesy : IMA World HealthOn the other hand, many researchers have looked at it from the perspective of the West. According to them, during the endemic presence of the tsetse fly, it was almost impossible for cattle to survive. This led to early domestication of animals in western countries. As a result, incomes grew and there was greater investment in technology. Over time, this led to faster long-run economic growth.
A colonial solution
A study conducted by Simon Johnson and James Robinson states that the countries with extremely hot climates were not preferred by the Europeans. They only colonised these countries so that they could extract their natural resources. Thus, they were not involved in the infrastructural and economic development of these nations. This depletion of natural resources and lack of proper institutions might have led to a lower rate of economic growth.
Meanwhile, the cold countries, that is the European nations, were the colonisers and this gave them an upper hand over the rest of the world.
They underwent many industrial revolutions and technical advancements before the countries which they colonised. This rise in income led to an increase in investment and greater spending on research and development. The existence of well-developed institutions for patent, copyrights etc. also promoted innovation in these countries.
The colonial rule, a period of backward development for the tropical regions | Picture Courtesy : Modern GhanaSome more claims
There are studies that claim that colder climates expand the size of the human brain. Ergo, it creates an intelligence differential between countries. This leads to the observed differences in income. The productivity of workers is also believed to fall with a rise in temperature as heat leads to frustration.
Still others believe that in cold countries, the harsh climatic conditions force people to plan ahead in the future and increase their savings. This creates capital, and thus, income rise. However, these claims have not received much support.
With many explanations at hand, one might choose to believe whichever seems most plausible. Economic growth depends on a variety of factors and pinpointing the variables is not easy. There might be a third factor or a combination of various factors that have led to such a phenomenon. The hard part, namely identifying the factors, remains a mystery.