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Economic growth and economic development 201

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Log Population Density in 1500 6 7 8 9 10 AGO ARG AUS BDI BEN BHS BLZ BOL BRA BRB BWA CAF CAN CHL CIV CMR COL COM CPV CRI ECU EGY ERI GAB GHA GIN GMB GRD GUY HKG HND HTI IDN IND JAM KEN

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Introduction to Modern Economic Growth

.

Log Population Density in 1500

6 7 8 9 10

AGO

ARG AUS

BDI

BEN

BHS

BLZ

BOL BRA

BRB

BWA

CAF

CAN

CHL

CIV CMR COL

COM CPV

CRI

ECU

EGY

ERI

GAB

GHA GIN GMB

GRD

GUY HKG

HND

HTI

IDN

IND JAM

KEN KNA

LAO

LCA

LKA

LSO

MAR

MDG MEX

MLI MOZ MRT

MWI

MYS NAM

NIC

NPL

NZL

PAK

PAN

PER PHL PRY

RWA

SDN SEN

SGP

SLE

SLV

TCD

TGO

TTO

TUN

TZA

UGA

URY USA

VCT VEN

VNM ZAF

ZAR ZMB ZWE

Figure 4.6 Reversal of Fortune: population density in 1500 versus

income per capita in 1995 them on the former European colonies

the late eighteenth and early nineteenth centuries Moreover, a wealth of qualitative and quantitative evidence suggests that this went hand in hand with industrializa-tion (see, for example, Acemoglu, Johnson and Robinson, 2002) Figure 4.8 shows average urbanization in colonies with relatively low and high urbanization in 1500 The initially high-urbanization countries have higher levels of urbanization and pros-perity until around 1800 At that time the initially low-urbanization countries start

to grow much more rapidly and a prolonged period of divergence begins

These patterns are clearly inconsistent with simple geography based views of relative prosperity In 1500 it was the countries in the tropics which were relatively prosperous, today it is the reverse This makes it implausible to base a theory of rel-ative prosperity on the intrinsic poverty of the tropics, climate, disease environments

or other fixed characteristics

Nevertheless, following Diamond (1997), one could propose what Acemoglu, Johnson and Robinson (2002a) call a “sophisticated geography hypothesis,” which claims that geography matters but in a time varying way For example, Europeans

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