How far does the ancestry of a country’s citizens determine its income level and growth rate? Is it more important than where that country stood in 1500?

Introduction

While substantial evidence support that quality of institutions affect the development of a country, many literatures also suggest a role for ancestral factors in determining economic outcomes of a country. Spolaore an Wacziarg (2013) mentioned that history contributes to present outcomes through people inheriting certain characteristics that are influential to development over many generations, which implies a possible cultural impact on economies today. Several research also found that geographic factors influence current income level, either directly or indirectly affecting income and productivity (ibid.).

Furthermore, Acemoglu and Robinson (2002) recorded a possible ‘reversal of fortune’, where due to European colonisation, countries that were prosperous pre-colonisation in 1500 are presently underdeveloped and vice versa. Through examining the extent to which ancestral factors affect income level and growth rate and the validity of ­­­­­theory of ‘reversal of fortune’, this essay aims to show that cultural and geographical influences are more important in determining a countries income level and growth rate than its level of economic development in 1500.

Culture

The dual inheritance theory states that interaction of cultural and genetical factors affects the development of social norms and institutions, which implies an influence on economic outcomes (Spolaore and Wacziarg, 2013).

According to Nunn (2008), the underdevelopment of Africa can be attributed to its history. In addition to effects of colonisation on Africa’s economy, there was a high prevalence of slave trade from 1400 to 1900 which impacted its economic development (ibid.). Nunn (2008) found that the poorest African countries today are those in which slave trade were most prevalent. Slave trades perverted the political and legal system, and created a culture for enslavement (ibid.). False accusations of crime or witchcraft also became a common method to acquire slaves and the persistence of such actions deteriorates trust within the community (ibid.).