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

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  • Quamrul Ashraf
  • Oded Galor

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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17640.

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Date of creation: Dec 2011
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Handle: RePEc:nbr:nberwo:17640

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Cited by:
  1. Enrico Spolaore & Romain Wacziarg, 2009. "War and Relatedness," Discussion Papers Series, Department of Economics, Tufts University 0734, Department of Economics, Tufts University.
  2. Ticchi, Davide & Verdier, Thierry & Vindigni, Andrea, 2013. "Democracy, Dictatorship and the Cultural Transmission of Political Values," IZA Discussion Papers 7441, Institute for the Study of Labor (IZA).
  3. 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.
  4. Lagerlöf, Nils-Petter, 2014. "Population, technology and fragmentation: The European miracle revisited," Journal of Development Economics, Elsevier, vol. 108(C), pages 87-105.
  5. Alberto Alesina & Johann Harnoss & Hillel Rapoport, 2013. "Birthplace Diversity and Economic Prosperity," CReAM Discussion Paper Series 1304, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  6. repec:cge:warwcg:139 is not listed on IDEAS
  7. Litina, Anastasia, 2012. "Unfavorable land endowment, cooperation, and reversal of fortune," MPRA Paper 39702, University Library of Munich, Germany.
  8. Casey, Gregory P. & Owen, Ann L., 2010. "Inequality and fractionalization," MPRA Paper 25493, University Library of Munich, Germany.
  9. Litina, Anastasia, 2013. "Unfavorable Land Endowment, Cooperation, and Reversal of Fortune," CAGE Online Working Paper Series 114, Competitive Advantage in the Global Economy (CAGE).

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