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Geography and Economic Growth financial growth

If you look at the African continent, perhaps the first word to come to mind is “enormous.” And that’s true. You could fit most of the United States, China, India, and a lot of Europe, into Africa. But if you compare Africa to Europe, Europe has two to three times the length of coastline that Africa has.

But what does coastline length have to do with anything?

Well, coasts mean access to water.

As benign as water might seem, it’s a major driver of economic growth. Adam Smith, the father of modern economics, argued that access to water reduced the cost of trade, and gave merchants access to larger markets. These larger markets incentivized specialization and innovation.

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These twin processes ultimately spurred trade activity, and consequently, economic growth.

As an end result, civilization tended to grow wherever trade was easiest.

If you want proof of this, think of a few major cities.

Look at Istanbul, New York, Venice, Hong Kong, London, and similar areas. What do they all have in common? They all sit near a major coast or a major river. In contrast, look at some of the poorest areas in the world—places like Kampala, or Pointe-Noire. These places are all landlocked. Since goods are easier to transport over water than over land, trade in landlocked areas is more expensive.

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And what happens when trade is more expensive?

It becomes harder to spark economic growth.

What this all means is economic growth is not only affected by a country’s rules and institutions, but by a country’s natural blessings, or natural hindrances, too. The effects of geography on growth cannot be discounted.

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37 thoughts on “Geography and Economic Growth financial growth”

  1. How's Africa landlocked when I live in the city of Tanzania that clearly has access to the Indian ocean? We have Zanzibar that's an island itself and most of you Americans and Europeans flock to Africa for trade and natural resources. We have the biggest river, Nile. Did you do your research well? A few landlocked countries do not represent the entire Africa!

  2. Incorrect maps of India is used in the video, highly offended. About 10% of the country's geography is not shown. Please use correct maps in future videos

  3. https://youtu.be/B8z6XS2jieE?t=116 "been landlock is like a national tariff, a tax on trade. And if natural tariffs are bad for growth, then perhaps tariffs created by governments aren't that great for growth either."
    So many wrong things in that statement aside of the passive aggressivity:

    First, to show how bad is been landlocked you are comparing it with tariffs, assuming that everybody agrees that they are bad for the economy. But then you immediately use that comparison to hint that tariffs are bad, assuming that everybody agrees that been landlocked is bad (at this point in the video you are supposed to be summing up the whole video).

    And secondly the comparison is far from perfect. Trading as a landlocked country is more expensive, as it would be with a tariff; but in the case of tariffs the government gets more income. So tariffs are way better than been landlocked.

  4. Usury is the root of all evil and leads to a growth compulsion. The cancer of the world.
    A crime against humanity! Back to the roots. Arsonists playing firefighters.

    Georgia Guidestones: "Maintain humanity under 500,000,000 in perpetual balance with nature."
    "Be not a cancer on the earth — leave room for nature — leave room for nature"
    "A total world population of 250-300 million people, a 95% decline from present levels, would be ideal."
    -CNN Founder Ted Turner

    "Growth for the sake of growth is the ideology of the cancer cell." -Edward Abbey
    No growth for the sake of growth, but for the debt and the greed of profit.

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  5. Natural tariffs are wasted, government tariffs are collected and spent on actual things. Of course this doesn't mean heavy tariffs are bad, protectionism and mercantilism are outdated economic policy. I'm not a wonk in this issue, but I'm pretty sure tariffs are still a usable tool in stabilizing the market as well as a form of revenue for the government.

  6. This video is inaccurate and short-sighted. Water access doesn't translate to innovation, what does create "innovation" is supply and demand, destabilization of competing markets, propaganda, war, corruption, and imperialism.

  7. Clearly the geographic conditions are a factor of development, but it is not so determining as institutions and the fact that those countries where colonized and weren't allowed to look for their own economy. As stated by Acemoglu and Robinson, democracy is a turning point for growth and development.

  8. How about foreign policy and military dominance, that has dictated the success and exploitation of failing nations on the receiving end, that have syphoned the resources of once great nations for the benefit of nations capitalising on them. Africa could be great with its natural resources if not for the might of corporations and corruption.

  9. Africa has many long and large rivers and bodies of water to transport anything. But once again the label of poverty without a definition thereby promoting and sustaining the propaganda of Africa as a poor place. If Africa is indeed poor then why is Europe fixed on disrupting the stability of the continent by wanting to control the affairs and resources? Africa apparently has more than "poverty". Europe and America are in love with Africa's riches and love to call the continent "poor" it hides their intentions and keeps people away from discovering their evil deeds.

  10. I'm willing to bet that if a land locked African Country did a better job with it's rule of law and established a sales tax only tax code, the sales tax being around 15% to 20% & 10% for exports, along with Free Trade and no Tariffs they would see a major boost to their economic growth. What Corporation wouldn't want to be in a country with zero corporate taxes? and what rich person wouldn't want to retire in a zero income tax country? but that's entirely up to their rule of law, these nations tend to be in constant state of conflict with bribery being an epidemic, otherwise this economic model would give them an edge against their global competition.

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