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Was the poverty of Africa determined in 1000 BC?

The usual development conversation about determinants of per capita income revolves around modern choices of institutions or economic policies. But what if history is the main determinant of development today?

A paper by Diego Comin, Erick Gong, and myself was just published in the American Economic Journal: Macroeconomics. We collected crude but informative data on the state of technology in various parts of the world in 1000 BC, 0 AD, and 1500 AD.

1500 AD technology is a particularly powerful predictor of per capita income today. 78 percent of the difference in income today between sub-Saharan Africa and Western Europe is explained by technology differences that already existed in 1500 AD – even BEFORE the slave trade and colonialism.

Moreover, these technological differences had already appeared by 1000 BC. The state of technology in 1000 BC has a strong correlation with technology 2500 years later, in 1500 AD.

Why do technological differences persist for so long? The ability to invent new technologies is much greater when you have more advanced technology already. James Watt had acquired a lot of tech experience in the mining industry which he used to invent the steam engine. Other people with the ability to make steel could then slap his steam engine on a vehicle running along steel rails and give us railroads.

Past technology alters probabilities of future success, but does not completely determine it. The most famous counter-example: China was historically technologically advanced and did NOT have the industrial revolution.

A large role for history is still likely to sit uncomfortably with modern development practitioners, because you can’t change your history. But we have to face the world as it is, not as we would like it to be: deal with it. Perhaps when you acknowledge the importance of your own history, you are then more likely to transcend it.

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60 Comments

  1. Chris Waluk wrote:

    It surprises me that this finding is deemed un-PC. If anything it proves that African countries have been at a disadvantage for thousands of years now, and this disadvantage has absolutely nothing to do with race. So what’s un-PC about that?

    I actually find this finding optimistic as is that it shows hope for an Africa amongst a global economy. When Africa’s problems are pinned on corruption and colonization, there’s no credible reason to think that cleaning up the corruption and exploitation will lead to a prosperous economic future. On the other hand, this theory tells me that the playing field could level itself out in a more connected world.

    Forgive me if this sounds un-PC, but no country will ever advance while playing a blame game. Instead of pointing to injustices of the past, African countries need to have a more optimistic/ambitious plan for the future.

    Posted July 18, 2010 at 10:28 am | Permalink
  2. Dan Kyba wrote:

    This has been some post.
    @ Winslow has provided the best advice – with a nod to people such as Jared Diamond, David Landes, Daniel Boorstin and Robert B. Edgerton – considering the time and geographical sweep of the study, a multi-disciplinary team was definitely in order to provide depth and a barrier against PC.

    My two comments:
    1) The long time line and geographic dispersion intuitively tells me that there are a lot of external variables out there which can potentially clutter up the correlations.

    2) Intuitively, I would consider Khan’s Type II Transition Failure as the potential smoking gun, taking me back to the need for a multi-disciplinary team.

    Posted July 18, 2010 at 1:18 pm | Permalink
  3. Many of these comments suggest that nothing should be written by an economist without co-authoring with people from other disciplines. I wonder whether the same people would insist that every historian or sociologist who writes an article must co-author with an economist, every time. An individual article is a contribution to a broader literature, and each individual article does not need to incorporate all possible viewpoints in order to be an important contribution.

    Many other comments suggest that no quantification of historical information can ever be useful. In my career I’ve encountered many qualitative thinkers who categorically rule out all quantitative analysis. I’ve never encountered a quantitative thinker who rules out all qualitative analysis. Funny, that.

    Numbers are one of many ways to organize information. While they can in some cases have the drawback of oversimplifying complex phenomena, they have the large advantage of creating transparency in how hypotheses are formulated and tested (provided one takes the time to study quantitative methods), and thus contribute to the falsifiability of claims.

    Most of the best research programs in social science use both quantitative and qualitative methods. Easterly’s research program, if you’ve read even the first layer of his writings, uses both methods. Arguing that quantification never serves any useful purpose is unconvincing and anti-intellectual.

    Posted July 18, 2010 at 2:23 pm | Permalink
  4. Dan Kyba wrote:

    @ Clemens

    re ‘nothing and ‘every thing’ which is somewhat extreme; my point, if I am one of those you are addressing, is that as you get further away from the controlled environment of a medical lab, external variables begin to play an ever increasing role. Since such variables will often involve other disciplines, it is best in such cases to consider either collaborating or consulting with the experts in those disciplines.

    The literature has exploded over the past number of decades making it difficult if not impossible for a graduate student to follow the 19th century European style of university education where the candidate follows no curriculum, has no real fixed time table and when he has prepared his dissertation presents himself for his oral examination in his one principle and two subordinate topics plus philosophy.

    That old system created well-rounded generalists with a specialty; today’s university system creates great specialists but who are not necessarily as well rounded – hence the collaboration argument when taking on such a broad geographical and historical sweep as Prof. Easterly has done.

    Posted July 18, 2010 at 7:15 pm | Permalink
  5. fundamentalist wrote:

    Easterly: “I think the other thing generating heat here is the different approaches of historians and economists.”

    I follow Mises and Hayek on this point, who wrote that history is so vast and complex that one must approach it with sound theory in order to make sense of it. History requires filtering because there is so much data, and those who claim to approach it without theory are doing nothing but working according to a theory they refuse to examine.

    Clemens: “I’ve encountered many qualitative thinkers who categorically rule out all quantitative analysis. I’ve never encountered a quantitative thinker who rules out all qualitative analysis. ”

    Along the same line, Austrian economists promoted qualitative thinking and skepticism about quantitative analysis. The problem with quantitative analysis is that those who use it tend to obscure their assumptions and the theory under which they operate, both of which guide the process of quantitative analysis.

    Posted July 19, 2010 at 9:50 am | Permalink
  6. Robert Tulip wrote:

    This paper suggests a causal link between past and present technology status in military, agriculture, communications, transport and industrial sectors. It seems rather obvious that a society whose antecedents used stone tools will generally be poorer than one where iron was in use. Materials bring a cluster of institutional and cultural spillovers. Iron and bronze created surplus value that enabled employment of soldiers, judges and priests. Over centuries these professions formed institutions whose values are embedded in culture, producing norms of behaviour.

    “Determinism” in economic history need not imply that countries cannot escape their situation. There is nothing to stop poor countries from copying the methods of the advanced nations as long as they also adopt the values that support technology. Japan copied European methods to industrialise in the nineteenth century. China copied systems of capitalist governance from Singapore in the 1980s.

    In Table 4, the current standard deviation of Oceania (0.32), presumably includes Australia and Papua New Guinea, and is rivalled in variance only by Africa in 1000BC. Does inclusion of North African nations such as Carthage and Egypt cause this variance? Is it overstating the level of prehistoric Sub Saharan Africa? How do you fit in ancient Egypt with the high technology of the pyramids?

    Urbanization rate appears reasonable as a proxy for the development level for pre-modern periods (Table 6). But it opens the question why some development practitioners today are biased against urbanisation, despite its role as a driver of growth.

    The article says the wealth of the “Neo-Europes”, the United States, Canada, Australia, and New Zealand, is “likely have something to do with the partial or nearly complete replacement of the original inhabitants”. Yes, and ‘likely’ is an understatement. But is this “mainly a function of … the susceptibility of natives to European diseases”? It is difficult to measure the relative roles of disease, technology and culture. Disease is a bigger factor than claimed in some traditional imperial histories, but asserting that disease is the main factor seems exaggerated.

    Posted July 20, 2010 at 11:28 pm | Permalink
  7. Steve Mack wrote:

    Prof. Easterly Genesis 9:18-10:32 would have saved your research effort (after all,it did form part of narrative on such issues for many generations) :

    24 When Noah awoke from his wine and found out what his youngest son had done to him, 25 he said,
    “Cursed be Canaan!
    The lowest of slaves
    will he be to his brothers.”

    26 He also said,
    “Blessed be the LORD, the God of Shem!
    May Canaan be the slave of Shem.

    27 May God extend the territory of Japheth ;
    may Japheth live in the tents of Shem,
    and may Canaan be his slave.”

    Posted July 21, 2010 at 6:27 am | Permalink
  8. kadebe wrote:

    Thanks for this. I have yet to read your paper.I wonder how the thesis here relates to your findings,back in 1997, that: “…ethnic diversity helps explain cross-country differences in public policies and other economic indicators. In the case of Sub-Saharan Africa, economic growth is associated with low schooling, political instability, underdeveloped financial systems, distorted foreign exchange markets, high government deficits, and insuffi-cient infrastructure. Africa’s high ethnic fragmentation explains a significant part of most of these characteristics”?

    Posted July 21, 2010 at 7:07 am | Permalink
  9. Guy wrote:

    In reality you have 2 data points: Western Europe and Africa. Plotting a chart with a 100 points is grossly misleading. This, of course, is also true for most (all?) empirical work in macro development.

    Anyhow, there is no shortage of exceptions for the general thesis. The United States is one (not much there in terms of technology 500 years ago). Your thesis cannot explain why the US is richer than Malawi,

    Posted July 22, 2010 at 8:42 am | Permalink
  10. This is an interesting debate. I also have a theory about the differences between Africa, probably the mid-west of America and South American indigenous people. In Most of these areas nature was giving each plentiful of resources to live. The traditional African life style was livestock production, there is very little that one needs in terms of technology. The weather was conducive to not thinking of tomorrow, everything was there. The traditional African tribes man only needed to move away from a patch of land if it could not sustain his livestock, after several years the land would have been repaired by nature and that was it. The same goes for the plainsmen in America. It was not necessary to plan and provide for the long term. The cold winters and short production periods of the colder north necessitated thinking about how to provide food etc. for the long cold periods where production was not possible.
    As Europeans spread over the world they took their technological expertise with them and because of that changed the traditional lifestyles of everyone they met. Fences appeared which limited the migration of the African tribesman, limited the sustained utilization of the buffalo herds in the mid-west and enslaved the people of South America through religion and unbridled migration, seeking that elusive Eldorado.

    Can one blame Africa for not conforming to the western idea of development – I do not think so. Can one blame the north for Africa’s dilemma – only if one measures the north’s level of development with that of Africa and want to enforce that. Technology is not the only measure of success of regions. I do not know if any person have investigated the traditional African, mid-western of South American ways of life but I am convinced that that would be interesting reading from a development point of view.

    Posted July 23, 2010 at 2:42 pm | Permalink

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