Introduction
It’s intriguing to observe that countries closest to the equator tend to be poorer compared to temperate or colder nations. Several factors, including lower GDP per capita and productivity, seem to correlate with proximity to the equator and higher average temperatures. These factors are often associated with decreased human productivity, increased political instability, and a weaker rule of law.
Impact of Climate on Poverty
High temperatures and tropical diseases can hinder work and study, leading to higher infant mortality rates. This, in turn, results in larger family sizes due to higher fertility rates, causing families to invest less in each child’s education. Moreover, historical exploitation of cash crops like sugarcane, cotton, cocoa, and coffee in some tropical regions has contributed to poverty. Combined with the mining of precious metals, large-scale commercial agriculture demanded extensive human labor, potentially fostering slavery and hindering economic development.
In certain cases, poverty can be attributed to the “Natural Resource Curse,” where abundant oil or mineral resources elevate internal incomes but increase manufacturing costs, obstructing industrialization. Additionally, many tropical soils are unsuitable for productive agriculture despite lush vegetation. They are prone to erosion, leaching, degradation, and low fertility. Although advanced civilizations like the Maya Classic and Khmer in Cambodia thrived in tropical regions, there are deserts near the tropics due to the Hadley Cell (a high-pressure system suppressing monsoon rains) or cold ocean currents, as seen in Mexico, South America, and Africa.
Colonialism and Poverty
Some argue that colonialism explains the persistent poverty in tropical regions. However, this argument is unfounded since numerous former colonies like the United States, Australia, Canada, New Zealand, Uruguay, and to some extent Argentina, Chile, South Africa, Costa Rica, and Panama are prosperous. Countries like Ethiopia and Thailand, which were never colonized, also face underdevelopment and poverty. Conversely, countries like Malaysia, Taiwan, Singapore, and Hong Kong, which were not colonized or were colonized for shorter periods, are now among the wealthiest nations.
Historically, Africa and the Americas had significantly lower development levels than Europe or Asia due to geographical continental determinants, insufficient nutritious grains, and lack of domesticable animals for labor. Moreover, temperate regions received more European colonists without tropical diseases, bringing metropolitan institutions, higher productivity, technological advancements, and trade capabilities.
Institutions and Development
Despite the relevance of geographical, historical, and climatic factors, institutions play a crucial role in development and prosperity. Key elements include property rights, the rule of law, legal certainty, equality before the law, meritocracy, healthy competition, economic and employment freedom, quality public education, political representation, a robust civil society, social cooperation, an efficient and competent state, effective markets, security, and robust legal protection against state abuses. These factors are more prevalent in temperate and colder regions.
