Can a Nation's Soil Explain Its Economic Fortunes?

If your ancestors could grow crops easily—and thus get proof that patience pays off—you're more likely to value distant payoffs, argue two economists in a new paper.

Ueslei Marcelino/Reuters

Jared Diamond argued, in his 1997 book Guns, Germs, and Steel, that geography is fate. One thread of his theory sought to explain why societies in Eurasia developed more quickly than in the Americas and Africa. Because Eurasia is oriented horizontally, he argued, all of its ancient inhabitants were at roughly similar latitudes, which meant that they worked with roughly similar environments and climates. Thus, a particularly valuable crop or domesticated animal could be put to use just about anywhere on the continent, and one group’s best practices could easily be adopted by other groups—not the case in vertical Africa. Hence, different rates of development.

Two economics researchers, Brown’s Oded Galor and Southern Methodist University’s Ömer Özak, recently published an ambitious paper reminiscent of Diamond's work. Like Diamond, they make an argument that is so simple and intuitive that it at first glance appears reductive: People whose ancestors come from places with richer harvests are more likely to appreciate the benefits of long-term thinking. Essentially, the theory suggests that because people who lived in especially fertile areas had more reason to believe that patience pays off, they came to create cultures that are okay with delaying gratification.

The Higher the Potential Crop Yield, the More Likely a Culture Is to Value Long-Term Thinking
Galor and Özak

Galor and Özak’s thinking, while data-driven, mostly yields abstract conclusions: The higher the crop yield, the more patient people will be, and the more patient people are, the more dependably their economies will grow. However, the pair's findings are occasionally quite concrete: Modern-day countries that, roughly 500 years ago, had crop yields one standard deviation higher than average build roughly one year of extra schooling into their education systems. In other words, if wheat was really shooting up for your ancestors 500 years ago, then you’re more likely to have had 12 years of schooling instead of 11.

A belief in the importance of education is just one part of why long-term thinking can contribute to economic growth. Economies that take the long view are more likely to make capital investments and spend money on research, and these tendencies often bring about lasting prosperity.

It's important, though, not to let soil become the sole explanation for today's inequalities. "Why is central Africa experiencing political, social, and economic problems today?," asks J. P. Daughton, a professor of history at Stanford. "I don’t think any answer could come close to being complete without including extensive discussion of the extreme social dislocation and economic ravaging that Europeans caused between, say, 1890 and 1960." Daughton is skeptical about the link between pre-Colombian crops and modern-day behavior; 600 years is too long a time, he insists, for any culture not to have changed profoundly.

Özak and Galor do their best to show that pre-Colombian agricultural productivity, and not another factor, is the variable that matters. To rule out the possibility that culture was affecting agricultural productivity, Galor told me, he and Özak took advantage of a massive data set from the United Nations that indicates which crops can grow where, so they could look at potential crop output rather than what people actually grew in the past. They also evaluated second-generation immigrants' time preferences in order to make sure that they were determined by ancestral culture rather than the culture of an adopted homeland. Further, they tried limiting their analysis to crops that were native to each region before the Columbian Exchange—that is, no potatoes allowed in Europe—and confirmed that crop yields hundreds of years ago dictate time preferences today.

People often talk about human lives as being, at least partially, predetermined: It’s a matter of where you were born, how much money your parents made, how much melanin is in your skin. Galor and Özak’s paper suggests that it's possible to zoom out even further and still see that, to an extent, the economic fortunes people are born into are not of their making.