Acton Institute Powerblog

How Geography Affects Economic Growth

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The continent of Africa has so much space that you could fit most of the United States, China, India, and a lot of Europe onto it. But if you compare Africa to Europe, Europe has two to three times the length of coastline that Africa has.

Why does that matter? Because, as this fascinating video by Marginal Revolution University explains, coasts mean access to water which makes trade easier and increases economic growth.

As the video explains, economic growth is not only affected by a country’s rules and institutions, but by a country’s natural blessings and natural hindrances.

Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).


  • Mises has a good section on the nonsense of geographical determined development in his “Theory and History.” It plays no role at all. In fact, trade plays a very small role. Geography and trade have been grossly exaggerated as agents of development. Geography has played almost no role whatsoever and trade follows development instead of creating it.

  • Here is Mises on the fallacy that geography determines development:

    Mises in Theory and History An Interpretation of Social and Economic Evolution:

    Environmentalism is the doctrine that explains historical changes as produced by the environment in which people are living. There are two varieties of this doctrine: the doctrine of physical or geographical environmentalism and the doctrine of social or cultural environmentalism.

    The former doctrine asserts that the essential features of a people’s civilization are brought about by geographical factors. The physical, geological, and climatic conditions and the flora and fauna of a region determine the thoughts and the actions of its inhabitants. In the most radical formulation of their thesis, anthropogeographical authors are eager to trace back all differences between races, nations, and civilizations to the operation of man’s natural environment.

    The inherent misconception of this interpretation is that it looks upon geography as an active and upon human action as a passive factor. However, the geographical environment is only one of the components of the situation in which man is placed by his birth, that makes him feel uneasy and causes him to employ his reason and his bodily forces to get rid of this uneasiness as best he may. Geography (nature) provides on the one hand a provocation to act and on the other hand both means that can be utilized in acting and insurmountable limits imposed upon the human striving for betterment. It provides a stimulus but not the response. Geography sets a task, but man has to

    solve it. Man lives in a definite geographical environment and is forced to adjust his action to the conditions of this environment. But the way in which he adjusts himself, the methods of his social, technological, and moral adaptation, are not determined by the external physical factors. The North American continent produced neither the civilization of the Indian aborigines nor that of the Americans of European extraction.

    Human action is conscious reaction to the stimulus offered by the conditions under which man lives. As some of the components of the situation in which he lives and is called upon to act vary in different parts of the globe, there are also geographical differences in civilization. The wooden shoes of the Dutch fishermen would not be useful to the mountaineers of Switzerland. Fur coats are practical in Canada but less so in Tahiti…

    The truth contained in environmentalism is the cognition that every individual lives at a definite epoch in a definite geographical space and acts under the conditions determined by this environment. The environment determines the situation but not the response. To the same situation different modes of reacting are thinkable and feasible. Which one the actors choose depends on
    their individuality.