Land Inequality and the Origin of Divergence and Overtaking in the Growth Process: Theory and Evidence

Hebrew Univ. Dept. of Econ. Working Paper No. 2002-11

43 Pages Posted: 23 Jul 2002  

Oded Galor

Brown University - Department of Economics; Centre for Economic Policy Research (CEPR)

Omer Moav

University of Warwick - Department of Economics; Centre for Economic Policy Research (CEPR)

Dietrich Vollrath

University of Houston - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: August 18, 2002

Abstract

This research develops a unified growth theory that captures the transition from the domination of geographical factors in the determination of productivity in early stages of development to the domination of institutional factors in mature stages of development. It identifies a novel channel through which favorable geographical conditions that were inherently associated with inequality adversely affected the emergence of institutions that promote human capital accumulation. The research suggests that the distribution of land ownership within and across countries affected the nature of the transition from an agrarian to an industrial economy generating diverging growth patterns across countries. Furthermore, the qualitative change in the role of land in the process of industrialization brought about changes in the ranking of countries in the world income distribution. The basic premise of this research, regarding the negative effect of land inequality on public expenditure on education is established empirically based on cross-state data from the High School Movement in the first half of the 20th century in the US.

Keywords: Land Inequality, Institutions, Geography, Human capital accumulation, Growth

JEL Classification: O10, O40

Suggested Citation

Galor, Oded and Moav, Omer and Vollrath, Dietrich, Land Inequality and the Origin of Divergence and Overtaking in the Growth Process: Theory and Evidence (August 18, 2002). Hebrew Univ. Dept. of Econ. Working Paper No. 2002-11. Available at SSRN: https://ssrn.com/abstract=317934 or http://dx.doi.org/10.2139/ssrn.317934

Oded Galor

Brown University - Department of Economics ( email )

Providence, RI 02912
United States

HOME PAGE: http://www.econ.brown.edu/fac/Oded_Galor/

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

HOME PAGE: http://www.econ.brown.edu/fac/Oded_Galor/

Omer Moav (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

HOME PAGE: http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/moav

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Dietrich Vollrath

University of Houston - Department of Economics ( email )

Houston, TX 77204-5882
United States

HOME PAGE: http://www.uh.edu/~devollra

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