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The Diffusion of Development

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  • Wacziarg, Romain

    (Tufts U)

  • Spolaore, Enrico

    (Stanford U)

Abstract

This paper studies the barriers to the diffusion of development across countries over the very long run. We find that genetic distance, a measure associated with the amount of time elapsed since two populations' last common ancestors, bears a statistically and economically significant correlation with pairwise income differences, even when controlling for various measures of geographical isolation, and other cultural, climatic and historical difference measures. These results hold not only for contemporary income differences, but also for income differences measured since 1500 and for income differences within Europe. We uncover similar patterns of coefficients for the proximate determinants of income differences, particularly for differences in human capital and institutions. The paper discusses the economic mechanisms that are consistent with these facts. We present a framework in which differences in human characteristics transmitted across generations--including culturally transmitted characteristics--can affect income differences by creating barriers to the diffusion of innovations, even when they have no direct effect on productivity. The empirical evidence over time and space is consistent with this "barriers" interpretation.

Suggested Citation

  • Wacziarg, Romain & Spolaore, Enrico, 2006. "The Diffusion of Development," Research Papers 1898r1, Stanford University, Graduate School of Business.
  • Handle: RePEc:ecl:stabus:1898r1
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    More about this item

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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