The Historical Origins of Poverty in Developing Countries

In this chapter I explore the causal relationships between historical factors (for eg., geography, disease, colonial history, and technology) and poverty in developing countries. I start with a review of the existing theories. This is followed by a novel unified framework in order to causally relate these historical factors in explaining the process of development in Western Europe and the New World colonies. The final section applies this framework to explain why Africa, Latin America, and Russia fell behind. My central argument is that Western Europe benefitted from favourable geography which led to highly productive agriculture, food surplus, and institutions conducive to development. In contrast, Africa continues to suffer from unfavourable geography and disease. Institutional weaknesses in Latin America and Russia explain their relatively weak long term economic performance. I also argue that these historical factors matter for contemporary patterns of development across the globe. The chapter concludes with some suggestions for future research on this topic.