The Ecological Origins of Economic
The Ecological Origins of Economic and Political Systems Stephen Haber, Roy Elis, and Jordan Horrillo First Draft: April 12, 2012 This Draft: April 22, 2021 Abstract: Why do democracy and prosperity go hand in hand, and cluster geographically? Why has that pattern emerged only over the past two centuries? We take an approach to answering these questions that is commonly employed in the physical sciences, as well as in some fields of empirical macroeconomics, in that we focus on the exogenous factors that pushed a system toward different equilibrium paths of development. We discover that a vector of factor endowments that were binding constraints on the production, storage, and transport of calorie-dense foods during the period 1500-1800 explain roughly two-thirds of the variance in per capita GDP today; explain progressively less of the variance in levels of economic development (as measured by urbanization ratios) as we go back in time from 2000 to 1800; and explain almost none of the variance in 1700, 1600, and 1500. We obtain materially similar results when we substitute the level of democratic consolidation as the dependent variable. We offer an ecological theory to explain the mechanics by which the factor endowments of the period 1500-1800 conditioned paths of development in the period since 1800. The key insight is that local factor endowments related to how human beings could solve the great challenge they all faced—insuring against starvation —conditioned their pre- 1800 forms of social organization. Those forms of social organization then conditioned how they could respond to the next great challenge they all faced, absorbing rapidly a set of mutually- reinforcing and mutually-dependent legal, financial, governance, educational, transport, production, communication, and warfare technologies that underpinned modern economic growth and the consolidation of democracy.
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