The Diffusion of Development

61 Pages Posted: 18 Jul 2006

See all articles by Romain T. Wacziarg

Romain T. Wacziarg

UCLA Anderson School of Management; National Bureau of Economic Research (NBER)

Enrico Spolaore

Tufts University - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: April 2006

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.

Keywords: Barriers, genetic distance, income differences

JEL Classification: O11, O57

Suggested Citation

Wacziarg, Romain T. and Spolaore, Enrico, The Diffusion of Development (April 2006). CEPR Discussion Paper No. 5630. Available at SSRN: https://ssrn.com/abstract=916747

Romain T. Wacziarg (Contact Author)

UCLA Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Enrico Spolaore

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States

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