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Geography and economic development: a municipal approach for Colombia

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  • infocede

Abstract

The object of this paper is to determine the relationship between geographical variables and income per capita, income per capita growth, population density and population growth in Colombian municipalities. In order to carry out econometric estimations at municipal level we constructed a set of geographical variables based on soil, climate and road maps. We obtained some other geographical variables from the Colombian Institute of Geography (IGAC) homogeneous zone statistics. We found that geography affects both the level of municipal income per capita and its growth - being responsible for between 36% and 47% of the variance in municipal income per capita, and between 35% and 40% of the variance in municipal income per capita growth. It was established that, among the geographic variables, distance to domestic markets and soil type exercise the greatest influence on income per capita and its growth. Furthermore, geographical variables seem to be more significant for poor municipalities than rich ones. In poor municipalities, geography is responsible for between 25% and 32% of income per capita variance, and between 24% and 27% of income per capita growth variance. In contrast, in rich municipalities, geography is less important - being responsible for between 18% and 25% of income per capita variance and between 16% and 17% of income per capita growth variance. Thus, geography affects income and income growth via the productivity of the land, the availability of natural resources (such water and rivers), the presence of tropical diseases, and agglomeration. Although geography influences the fate of a region that is not the end of the story. Human factors, both public policy and private intervention, also play an important role. Education, infrastructure and more efficient public institutions can boost regional economic growth, and can help poor regions to overcome the poverty trap of low income and low economic growth.

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  • infocede, 2000. "Geography and economic development: a municipal approach for Colombia," Documentos CEDE 20090, Universidad de los Andes, Facultad de Economía, CEDE.
  • Handle: RePEc:col:000089:020090
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    References listed on IDEAS

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    3. Núñez, Jairo & Leibovich, José, 1999. "Los activos y recursos de la población pobre en Colombia," IDB Publications (Working Papers) 2033, Inter-American Development Bank.
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    6. Jóse Leibovich & Jairo Núñez, 1999. "Los activos y recursos de la población pobre en Colombia," Research Department Publications 3057, Inter-American Development Bank, Research Department.
    7. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," Harvard Institute of Economic Research Working Papers 1856, Harvard - Institute of Economic Research.
    8. Philippe Aghion & Peter Howitt, 1997. "Endogenous Growth Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011662, December.
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