Warwick Summer Workshop in Economic Growth, 2014
Economic Growth and Comparative Economic Development
A Lecture Series by
Oded Galor
Background:
The transition from an epoch of stagnation to an era of sustained economic growth has marked the onset of
one of the most remarkable transformations in human history. While living standards in the world economy
stagnated during the millennia preceding the Industrial Revolution, global income per capita has undergone
an unprecedented tenfold increase over the past two centuries, profoundly altering the level and distribution
of education, health, and wealth across the globe. The rise in the global standard of living, however, has not
been universally shared among individuals and societies. Variation across societies in the timing of the
take-off from stagnation to growth has led to a vast divergence in income per capita. Cross-country
inequality, which had been modest until the nineteenth century, has widened considerably, and the ratio of
income per capita between the richest and the poorest continents of the world has risen from a moderate 3:1
ratio in 1820 to a staggering 15:1 ratio in 2010.
The transition from an epoch of Malthusian stagnation to an era of sustained economic growth and the
corresponding divergence in income per capita across the globe have been at the center of an intensive
research effort during the past decade. The inconsistency of the predominant growth theories with some of
the most fundamental characteristics of the growth process, as well as their limited ability to shed light on
the deep historical origins of the vast global disparity in living standards, have led to the development of a
unified theory of economic growth that captures the growth process in its entirety. Unified Growth Theory
explores the fundamental factors that have contributed to the remarkable transition from stagnation to
growth and examines their significance for understanding the contemporary growth process of developed
and less developed economies.
Recent theoretical and empirical advancements have been fueled by the conviction that the understanding
of the global cross-country variation in economic development will be fragile and incomplete unless
growth theory can capture the principal driving forces behind the entire process of development and the
central role that deep-rooted factors (e.g., geography, institutions, culture, human capital, genetics) have
played in generating the current disparities in living standards.
Structure of the Lecture Series:
Lecture I: Growth and Comparative Development – An Overview
This introductory lecture will provide an overview of the nature of the growth process over the entire
course of human history. The lecture will provide extensive evidence about the emergence of the vast
inequality across countries in the past two centuries and the lack of convergence across countries in the past
few decades. It will describe the three regimes that characterize the growth process – the Malthusian
Epoch, the Post-Malthusian Regime, and the Modern Growth Regime – and the forces that contributed to
the transition between these regimes. The lecture will also provide a broad overview of the development of
the growth literature in light of the evidence – from a focus on the proximate causes of growth (i.e., factor
accumulation and technological progress), via the more fundamental causes of growth (inequality,
fractionalization, human capital, social capital, and institutions), to the ultimate causes of growth and
observed pattern of comparative development (geography and genetics).
Lecture II: Unified Growth Theory and Comparative Development
This lecture will present the foundation of Unified Growth Theory and its implications for the
understanding of comparative economic development. The lecture will explore the principal economic
forces that have generated the remarkable transition from stagnation to growth and will demonstrate their
significance for understanding the contemporary growth process of both developed and less developed
economies. Moreover, it will shed light on the notable divergence in income per capita across the globe
during the past two centuries. The theory will advance the understanding of fundamental aspects of
comparative economic development. Furthermore, it will highlight the persistent effects that variations in
historical and prehistorical conditions have had on the composition of human capital and economic
development across countries.
Lecture III: The Long Shadow of History – Geography and the Neolithic Revolution
This lecture will explore the role of deep-rooted factors in comparative economic development across the
globe. It will focus initially on the hypothesis developed by Jared Diamond that variations in economic
development can be traced to biogeographical conditions that led to a differential onset of the Neolithic
Revolution. The lecture will present falsification tests of the predictions of the theory and will demonstrate
that an earlier onset of the Neolithic Revolution was associated with a technological head start that
persisted until the year 1500. This effect is reflected in direct measures of productivity, as well as in
population density in the years 1–1500 CE. Nevertheless, the analysis will show that effect of the Neolithic
Revolution dissipates in the modern era and that the time elapsed since the Neolithic Revolution has no
significant effect on the technological level or income per capita in the contemporary period. The second
part of the lecture will focus on the role of geographical attributes (e.g., land productivity, isolation,
climate, disease environment) in comparative development. It will explore the reversal in the effects of land
productivity and distance from the equator on productivity in the process of development, and it will
examine the role of colonialism in the reversal of fortune among former colonies.
Lecture IV: The Long Shadow of History – Genetic Diversity
This lecture will explore the role of variation in genetic diversity in comparative economic development. It
will advance and empirically establish the hypotheses that (a) in the course of the prehistoric exodus of
Homo sapiens out of Africa, variation in migratory distance to various settlements across the globe affected
genetic diversity; and (b) this diversity has had a persistent hump-shaped effect on comparative economic
development, reflecting the trade-off between the beneficial and the detrimental effects of diversity on
productivity. While the low diversity of Native American populations and the high diversity of African
populations have been detrimental for the development of these regions, the intermediate levels of diversity
associated with European and Asian populations have been conducive for development throughout the
Common Era.
Reading List
Lecture I: Growth and Comparative Development – An Overview
Overview of the Evidence
Galor, O. Unified Growth Theory. Princeton University Press, 2011, Chapters 1-4.
Spolaore, E. and R. Wacziarg. (2013). “How Deep Are the Roots of Economic Development?” Journal of
Economic Literature, 51, 325-369.
Overview of the Literature on the Origins and the Persistent effect of:
The Neolithic Revolution:
Diamond, J. Guns, Germs, and Steel: The Fates of Human Societies. Norton, 1997.
Diamond, J. (2002). “Evolution, Consequences and Future of Plant and Animal Domestication,” Nature,
418, 700-707.
Putterman, L. (2008). “Agriculture, Diffusion and Development: Ripple effects of the Neolithic
Revolution,” Economica, 75, 729-748.
Olsson, O. and D. Hibbs. (2005). “Biogeography and Long-Run Economic Development,” European
Economic Review, 49, 909-938.
Institutions
North, D. C. Structure and Change in Economic History. Norton, 1981.
Engerman, S. and K. L. Sokoloff. “Factor Endowments, Institutions, and Differential Paths of Growth
among New World Economies,” In S. Haber ed. How Latin America Fell Behind: Essays on the
Economic Histories of Brazil and Mexico, 1800-1914. Stanford University Press, 1997.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. W. Vishny. (1999). “The Quality of Government,"
Journal of Law, Economics and Organization,15, 222-279.
Acemoglu, D., S. Johnson, and J. A. Robinson. (2001). “The Colonial Origins of Comparative
Development: An empirical investigation,” American Economic Review, 91, 1369-1401.
Acemoglu, D., S. Johnson, and J. A. Robinson. (2002). “Reversal of Fortune: Geography and institutions in
the making of the modern world income distribution,” Quarterly Journal of Economics, 117, 12311294.
Acemoglu, D. and J. A. Robonson. Why Nations Fail. 2012.
Nunn, N. (2008). “The Long-Term Effects of Africa's Slave Trades,” Quarterly Journal of Economics, 123,
139-176.
Michalopoulos, S. and E. Papaioannou. (2013). “Pre-Colonial Ethnic Institutions and Contemporary
African Development,” Econometrica, 81, 113-152.
Ethnic Fractionalization
Easterly, W., and R. Levine. (1997). “Africa's Growth Tragedy: Policies and ethnic divisions,” Quarterly
Journal of Economics, 112, 1203-1250.
Alesina, A., A. Devleeschauwer, W. Easterly, S. Kurlat,
“Fractionalization,” Journal of Economic Growth, 8, 155-194.
and
R.
Wacziarg.
(2003).
Alesina, A., and E. La Ferrara. (2005). “Ethnic Diversity and Economic Performance.” Journal of
Economic Literature, 43, 762-800.
Esteban J., L. Mayoral and D. Ray. (2012). "Ethnicity and Conflict: An Empirical Study," American
Economic Review, 102, 1310-1042.
Michalopoulos, S. (2012). “The Origins of Ethnolinguistic Diversity,” American Economic Review, 102,
1508-1539.
Ashraf, Q. and O. Galor. (2013). “Genetic Diversity and the Origins of Ethnic Fragmentation,” American
Economic Review P&P, 103, 528-533.
Cultural Traits:
Fernández R., A. Fogli and C. Olivetti. (2004). "Mothers and Sons: Preference Formation and Female
Labor Force Dynamics," Quarterly Journal of Economics, 119, 1249-1299.
Greenwood J., A. Seshadri and M. Yorukoglu. (2005). "Engines of Liberation," Review of Economic
Studies, 72, 109-133.
Algan, Y. and P. Cahuc. (2010). “Inherited Trust and Growth,” American Economic Review, 100, 20602092.
Durante, R. (2010). “Risk, Cooperation and the Economic Origins of Social Trust: An empirical
investigation,” Sciences Po.
Alesina, A., P. Giuliano, and N. Nunn. (2013). “On the Origins of Gender Roles: Women and the
plough,” Quarterly Journal of Economics, 128, 469-530.
Voigtländer, N. and H. J. Voth. (2013). “How the West “Invented” Fertility Restriction,” American
Economic Review, 103, 2227-2264.
Litina, A. (2013). “Natural Land Productivity, Cooperation and Comparative Development,” University of
Luxembourg.
Andersen, T. B., J. Bentzen, C. J. Dalgaard, and P. Sharp. (2011). “Religious Orders and Growth through
Cultural Change in Pre-Industrial England.”
Doepke, M. and F. Zilibotti. (2008). “Occupational Choice and the Spirit of Capitalism,” Quarterly Journal
of Economics, 123, 747-793.
Becker, S. O. and L. Woessmann. (2009). “Was Weber wrong? A human capital theory of Protestant
economic history,” Quarterly Journal of Economics, 124, 531-596.
Matthias Doepke & Michèle Tertilt, 2009. "Women's Liberation: What's in It for Men?," Quarterly Journal
of Economics, 124, 1541-1591.
Botticini, M. and Z. Eckstein. The Chosen Few: How Education Shaped Jewish History, 70-1492.
Princeton University Press, 2012.
Genetic Factors:
Galor, O. and O. Moav. (2002). “Natural Selection and the Origin of Economic Growth,” Quarterly
Journal of Economics, 117, 1132-1191.
Spolaore, E. and R. Wacziarg. (2009). “The Diffusion of Development,” Quarterly Journal of Economics,
124, 469-529.
Galor, O. and S. Michalopoulos. (2012). “Evolution and the Growth Process: Natural selection of
entrepreneurial traits,” Journal of Economic Theory, 147, 759-780.
Ashraf, Q. and O. Galor. (2013). “The Out of Africa Hypothesis, Genetic Diversity and Comparative
Economic Development,” American Economic Review, 103, 1-46.
Ashraf Q. and O. Galor. (2013). “Genetic Diversity and the Origins of Cultural Fragmentation,” American
Economic Review P&P, 103, 528-533.
Spolaore, E. and R. Wacziarg. (2013). “War and Relatedness.”
Arbatli E., Q. Ashraf, and O. Galor. (2013). “The Nature of Civil Conflict.”
Human capital:
Glaeser, E. L., R. La Porta, F. Lopez-de-Silanes, and A. Shleifer. (2004). “Do Institutions Cause Growth?”
Journal of Economic Growth, 9, 271-303.
Galor, O. Unified Growth Theory. Princeton University Press, 2011.
Easterly, W. and R. Levine. (2012). “The European Origins of Economic Development,” National Bureau
of Economic Research, No. w18162.
Gennaioli, N., R. La Porta, F. Lopez-de-Silanes, and A. Shleifer. (2013). "Human Capital and Regional
Development," Quarterly Journal of Economics, 128, 105-164.
Inequality:
Galor, O. and J. Zeira. (1993). “Income Distribution and Macroeconomics,” Review of Economic Studies,
60, 35-52.
Engerman, S. and K. L. Sokoloff. (1997). “Factor Endowments, Institutions, and Differential Paths of
Growth among New World Economies,” In S. Haber ed. How Latin America Fell Behind: Essays
on the Economic Histories of Brazil and Mexico, 1800-1914. Stanford University Press, 1997.
Galor, O., O. Moav, and D. Vollrath. (2009). “Inequality in Landownership, the Emergence of HumanCapital Promoting Institutions, and the Great Divergence,” Review of Economic Studies, 76, 143179.
Geographical Factors:
Gallup, J. L., J. D. Sachs, and A. D. Mellinger. (1999). “Geography
Development,” International Regional Science Review, 22, 179-232.
and
Economic
Galor, O. and A. Mountford. (2008). “Trading Population for Productivity: Theory and evidence,” Review
of Economic Studies, 75, 1143-1179.
Fenske, J. (2014). “Ecology, Trade and States in Pre-Colonial Africa,” Journal of the European Economic
Association, (forthcoming).
Dalgaard, C. J. and H. Strulik. (2010). “The Physiological Foundations of the Wealth of Nations.”
Andersen, T. B., C. J. Dalgaard, and P. Selaya. (2011). “Eye Disease and Development.”
Mayshar, J., O. Moav, and Z. Neeman. (2011). “Transparency, Appropriability and the Early State.”
Lecture II: Unified Growth Theory and Comparative Development
Galor, O. Unified Growth Theory. Princeton University Press, 2011.
Galor, O. and D. Weil. (1999). “From Malthusian Stagnation to Modern Growth,” American Economic
Review P&P, 88, 150-154.
Galor, O. and D. Weil. (2000). “Population, Technology, and Growth: From the Malthusian Regime to the
Demographic Transition and beyond,” American Economic Review, 90, 806-828.
Galor, O. and O. Moav. (2002). “Natural Selection and the Origin of Economic Growth,” Quarterly
Journal of Economics, 117, 1133-1191.
Hansen, G. and E. Prescott. (2002). “Malthus to Solow,” American Economic Review, 92, 1205-1217.
Lagerlof, N. (2006). “The Galor-Weil Model Revisited: A quantitative exercise,” Review of Economic
Dynamics, 9, 116-142.
Voigtlander, N. and J. Voth. (2013). The Three Horsemen of Riches: Plague, War and Urbanization in
Early Modern Europe. Review of Economic Studies, 80, 774-811.
Background Interview:
“Towards a Unified Theory of Economic Growth: Oded Galor on the Transition from Malthusian
Stagnation to Modern Economic Growth,” World Economics, June 2008 (An interview by Brian
Snowdon).
Mathematical Background:
Galor, O. Discrete Dynamical Systems. Springer, 2010.
Lecture III: The Long Shadow of History – Geography and the Neolithic Revolution
The Origins and the Persistent effect of the Neolithic Revolution:
Diamond, J. Guns, Germs, and Steel: The Fates of Human Societies. Norton, 1997.
Diamond, J. (2002). “Evolution, Consequences and Future of Plant and Animal Domestication,” Nature,
418, 700-707.
Olsson, O. and D. Hibbs. (2005). “Biogeography and Long-Run Economic Development,” European
Economic Review, 49, 909-938.
Galor, O., and O. Moav. (2007). “The Neolithic Origins of Contemporary Variations in Life Expectancy.”
Comin, D., W. Easterly, and E. Gong. (2010). “Was the Wealth of Nations Determined in 1000 BC?”
American Economic Journal: Macroeconomics, 2, 65-97.
Ashraf, Q. and O. Galor. (2011). “Dynamics and Stagnation in the Malthusian Epoch,” American Economic
Review, 101, 2003-2041.
Ashraf, Q. and O. Galor. (2013). “The Out of Africa Hypothesis, Genetic Diversity and Comparative
Economic Development,” American Economic Review, 103, 1-46.
The Persistent Effects of Geographical Factors:
(References in Lecture I)
Lecture IV: The Long Shadow of History – Genetic Diversity
Genetic Diversity and Comparative Development
(References in Lecture I)