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Cultural Diversity, Geographical Isolation, and the Origin of the Wealth of Nations

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  • Ashraf, Quamrul

    ()
    (Williams College)

  • Galor, Oded

    ()
    (Brown University)

Abstract

This research argues that variations in the interplay between cultural assimilation and cultural diffusion have played a significant role in giving rise to differential patterns of economic development across the globe. Societies that were geographically less vulnerable to cultural diffusion benefited from enhanced assimilation, lower cultural diversity, and more intense accumulation of society-specific human capital. Thus, they operated more efficiently with respect to their production-possibility frontiers and flourished in the technological paradigm that characterized the agricultural stage of development. The lack of cultural diffusion and its manifestation in cultural rigidity, however, diminished the ability of these societies to adapt to a new technological paradigm, which delayed their industrialization and, hence, their take-off to a state of sustained economic growth. The theory thus contributes to the understanding of the advent of divergence and overtaking in the process of development. Consistently with the theory, the empirical analysis establishes that (i) geographical isolation prevalent in pre-industrial times (i.e., prior to the advent of airborne transportation technology) has had a persistent negative impact on the extent of contemporary cultural diversity; (ii) pre-industrial geographical isolation had a positive impact on economic development in the agricultural stage but has had a negative impact on income per capita in the course of industrialization; and (iii) cultural diversity, as determined exogenously by pre-industrial geographical isolation, has had a positive impact on economic development in the process of industrialization.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6319.

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Length: 94 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6319

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Keywords: cultural assimilation; cultural diffusion; cultural diversity; geographical isolation; economic development; agriculture; industrialization;

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Cited by:
  1. Alesina, Alberto & Harnoss, Johann & Rapoport, Hillel, 2013. "Birthplace Diversity and Economic Prosperity," IZA Discussion Papers 7568, Institute for the Study of Labor (IZA).
  2. Enrico Spolaore & Romain Wacziarg, 2012. "War and Relatedness," Discussion Papers Series, Department of Economics, Tufts University 0769, Department of Economics, Tufts University.
  3. Davide Ticchi & Thierry Verdier & Andrea Vindigni, 2013. "Democracy, Dictatorship and the Cultural Transmission of Political Values," Carlo Alberto Notebooks 300, Collegio Carlo Alberto.
  4. Enrico Spolaore & Romain Wacziarg, 2013. "How Deep Are the Roots of Economic Development?," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 325-69, June.
  5. Anastasia Litina, 2012. "Unfavorable Land Endowment, Cooperation, and Reversal of Fortune," CREA Discussion Paper Series 12-07, Center for Research in Economic Analysis, University of Luxembourg.
  6. Olsson, Ola & Paik, Christopher, 2013. "A Western Reversal Since the Neolithic? The Long-Run Impact of Early Agriculture," CAGE Online Working Paper Series 139, Competitive Advantage in the Global Economy (CAGE).
  7. Casey, Gregory P. & Owen, Ann L., 2010. "Inequality and fractionalization," MPRA Paper 25493, University Library of Munich, Germany.

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