Tropics of Poverty

A common view is that the best way to reduce the wide gap in living standards between the world's rich and poor nations is for the latter to implement market reforms fostering economic growth. While he doesn't reject such advice, economist Jeffrey Sachs of Harvard University thinks it ignores a pertinent fact: the pervasive impact of climate on economic development.

As Sachs stresses in a new study, tropical economies are almost all poor, while those in temperate zones are generally rich. Of 30 nations classified by the World Bank as high-income, only two--Hong Kong and Singapore--are located in steamy climates. In 1992, output per capita in temperate nations averaged more than four times the level in tropical ones.

The economic gap wasn't always so large. Back in 1820, notes Sachs, per capita output in tropical regions lagged output in temperate zones by only 30%. The sluggish growth of tropical economies since then is what has created the current disparity. The critical question is: What has held these countries back?

Claims that colonialism is mainly responsible or that modern growth is linked to a capitalism rooted in European culture are belied by the woes of tropical countries that escaped colonization and by the rise of Asian powerhouses such as Japan and Korea, argues Sachs. The one explanation that holds up best is the impact of climate, which is found even in large nations where temperate regions are invariably wealthier than warmer ones.

As Sachs sees it, tropical regions face two related major ecological handicaps: low agricultural productivity and a high burden of disease. Tropical soils are typically depleted by the effects of heavy rainfall, for example, and tropical crops are beset by pests and parasites that thrive in hot climates without winter frosts. Similarly, warm climates favor the transmission of many tropical diseases that are borne by insects and bacteria.

Compounding these problems, many technical advances in farming and health care developed for application in temperate regions are not readily transferable to tropical areas. Over time, the rapid pace of temperate-region innovation and the lack of such innovation in the tropics has widened the zone's lead, so that temperate-zone grain productivity per acre today is 50% higher than in the tropics, while infant mortality adjusted for income levels is 52% lower.

The upshot: Most tropical nations remain mired in poverty. Poor agricultural productivity results in poor nutrition--which compounds medical and social ills. Many couples have lots of children in the hopes that some will survive. High fertility, in turn, strains resources and lowers per-child investments.

Is there a way out? Sachs points to such success stories as Hong Kong, Singapore, and Taiwan, which acted forcefully to control disease and which diversified their economies away from agriculture toward export-oriented manufacturing. But he notes that many tropical nations, especially in sub-Saharan Africa, lack resources to tackle their massive agricultural and health woes.

What such nations desperately need, he says, is assistance in developing and applying technologies aimed at solving these ecologically based problems. The economic boom of the late 1990s has had a big impact on the fortunes of African American families. According to an analysis of last year's Current Population Survey in the July issue of American Demographics, some 51% of black married-couple households had incomes of $50,000 or more, up from 47% in 1999. And the Census Bureau reported that a record 17% of blacks aged 25 and over held college degrees, compared with 15% the year before.

This newfound prosperity has sparked a black exodus from the central cities. Between 1980 and 1990, the share of blacks living in the suburbs jumped from 34% to 39%, says the magazine. (Meanwhile, the share of whites living in the suburbs rose by only two percentage points, and that of Hispanics by just three points.) On average, black suburban households have median incomes 44% higher than those of their city brethren, and some 10% boast incomes of at least $100,000. Those familiar with psychoanalytic theory may recall the notion of an "anal personality," which is characterized by traits supposedly derived from strict toilet training during infancy. People with anal personalities are typically described as neat, clean, and highly organized--with a particular penchant for saving and making money.

What brings this to mind is a recent study in the American Economic Review by Rachel Dunifon of the University of Michigan, Greg J. Duncan of Northwestern University, and Jeanne Brooks-Gunn of Columbia University. The authors are concerned with certain noncognitive personality traits and skills that affect economic success. They theorize that people with an ability to maintain order and efficiency in their lives--as reflected in the cleanliness of their homes--should do well in job markets and and raise children who are more successful in school and their future careers.

To test this idea, the study drew on survey data following a sample of families over several decades. Adjusted for such factors as socioeconomic status, education, and cognitive ability, the results indicate that the cleaner people's houses were (as rated by interviewers), the higher their earnings were 25 years later. And kids from cleaner homes tended to go further in school and to earn more in their future jobs.

Thus, the findings justify the study's title: "As Ye Sweep, So Shall Ye Reap."

The Good Business Issue
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