The Diffusion of Development

Enrico Spolaore and Romain Wacziarg ()

No 5630, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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 (search for similar items in EconPapers)
JEL-codes: O11 O57 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev
Date: 2006-04
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Related works:
Working Paper: The Diffusion of Development (2007)
Working Paper: The Diffusion of Development (2006)
Working Paper: The Diffusion of Development (2006)
Journal Article: The Diffusion of Development (2009)
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