Sunday, September 15, 2013

Economic Geography 2

The “ReshapingEconomic Geography” report from the World Bank that I started talking two weeks ago has an easy way to visualize the location of the main economic hubs in the World:

Clearly, most of the world’s economic activity takes place around the 40ยบ north of the Equator.

This picture is just static, if we could see the time evolution we would see that the number of transactions worldwide has increased dramatically, mainly due to a fall on costs of communicating. Although not everywhere, the following chart shows the number of checkpoints a road from Bamako to the coast has.

Its just impossible to imagine how anyone can make trade business there.

Even in the era of the Internet, transport costs are the main deterrent to economic growth. Bogota shows how economic time saving public transport reduced poverty rates in the slums:

Sometimes, this internal mobility creates interesting social disparities like the one that happen in Germany after the Reunification

As it can be seen economic variables are quite often determined by political decisions, and also political decisions of the past, like in the case just seen of Germany or the case of Africa.

Sunday, September 1, 2013

Economic Geography

In 2009 the World Bank published “Reshaping Economic Geograpy” a report on the field of economic geography,

The report is a full and detailed study on local, regional and global patterns of economic geography. There are many subsections all of them very interesting. One of the very first findings, the report describes, is about how people concentrate in cities as economic development progress.

Cities provide better economic opportunities than the countryside when countries are poor. That generates migrations of peasants from the countryside looking for a better quality of life in the city.

Interestingly, when countries become rich the countryside starts to perform better and the opposite migration happens. Concentration of population, gross product, and household consumption levels off when countries are rich.

How can economic geographic dispersion be measured? In page 76 of the same report, they use Distance in time to sizable settlements.

Greenland, north-eastern Siberia and Tibet are, according to this, the most remote regions.

Apart from geographic reasons, cultural differences is another obstacle for economic and population concentration. Africa probably one of the less concentrated is also one of the most cultural diverse.