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Institutions, Geography, Regions, Countries and the Mobility Bias

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  • Andrew Warner

Abstract

Recent research on the ultimate causes of the large differences in economic development across countries has framed the issue as a competition between geography and institutions. Some papers claim to have evidence that geography explains nothing after controlling for institutions. This paper argues and shows evidence that geography correlates with economic activity across regions within countries where institutions are far more constant than across countries. The paper also argues that mobility of factors can in theory completely mask the impact of geography if one looks only at output per-capita. Comparing cross-region with cross-country data and comparing regressions of output density with regressions of output per-capita, the paper finds evidence of this mobility bias. Finally the paper tries to integrate re-cent lines of research with an earlier line that looked at regional data as a laboratory to test for economies of scale. Overall the paper finds evidence for three important determinants of spatial income levels: geography, institutions and agglomeration economies associated with very large urban areas. One needs to consider all three to fully explain the pattern of economic activity across space.

Suggested Citation

  • Andrew Warner, 2002. "Institutions, Geography, Regions, Countries and the Mobility Bias," CID Working Papers 91, Center for International Development at Harvard University.
  • Handle: RePEc:cid:wpfacu:91
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    File URL: https://www.hks.harvard.edu/sites/default/files/centers/cid/files/publications/faculty-working-papers/091.pdf
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    References listed on IDEAS

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    1. Sachs, Jeffrey D & Warner, Andrew M, 1997. "Sources of Slow Growth in African Economies," Journal of African Economies, Centre for the Study of African Economies, vol. 6(3), pages 335-376, October.
    2. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1999. "Geography and Economic Development," International Regional Science Review, , vol. 22(2), pages 179-232, August.
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    8. repec:hoo:wpaper:e-94-11 is not listed on IDEAS
    9. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-342, April.
    10. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 01A, Center for International Development at Harvard University.
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Naudé, Wim & Matthee, Marianne, 2012. "Do Export Costs Matter in Determining Whether, When, and How Much African Firms Export?," Working Papers 38, JICA Research Institute.
    2. Mitton, Todd, 2016. "The wealth of subnations: Geography, institutions, and within-country development," Journal of Development Economics, Elsevier, vol. 118(C), pages 88-111.
    3. repec:esx:essedp:729 is not listed on IDEAS
    4. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    5. W.A. Naudé & W.F. Krugell, 2006. "Sub‐national growth rate differentials in South Africa: an econometric analysis," Papers in Regional Science, Wiley Blackwell, vol. 85(3), pages 443-457, August.
    6. Willem A. Naudé & Andrea Saayman, 2005. "Determinants of Tourist Arrivals in Africa: A Panel Data Regression Analysis," Tourism Economics, , vol. 11(3), pages 365-391, September.
    7. D. V. Shcherbakova & A. A. Medved, 2019. "Factors of Investment Attractiveness of Russian Regions," Administrative Consulting, Russian Presidential Academy of National Economy and Public Administration. North-West Institute of Management., issue 11.
    8. Medved, Anna & Shcherbakova, Darya, 2018. "Факторы Инвестиционной Привлекательности Регионов России [Factors of Investment Attractiveness of Russian Regions]," MPRA Paper 97124, University Library of Munich, Germany.
    9. Naudé, Wim, 2009. "Geography, transport and Africa’s proximity gap," Journal of Transport Geography, Elsevier, vol. 17(1), pages 1-9.
    10. W. A. Naude & W. F. Krugell, 2007. "Investigating geography and institutions as determinants of foreign direct investment in Africa using panel data," Applied Economics, Taylor & Francis Journals, vol. 39(10), pages 1223-1233.
    11. Gunnar Eskeland & Torben Mideksa, 2010. "Electricity demand in a changing climate," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 15(8), pages 877-897, December.

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