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« The Review of Austrian Economics - 19(1) | Main | What Does It Take to Get Into GMU's Econ PhD Program? »


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As a budding economic geographer, I find Sachs' geographic determinism puzzling. There are simply too many exceptions to the rule for the rule to stand: Australia and New Zealand are prosperous nations quite literally on the edge of nowhere (leaving aside their new orientation towards an emerging Asia); Chile, which is a very thin mountainous strip cut-off from most of the rest of S. America by the Andes in the east and desert in the north is relatively more prosperous than most of its near neighbors. At the same time, Central American nations are relatively poor, though they are proximate to the US and an emerging Mexico. And the geographic proximity of Myanmar to India and China, or of Albania to the rest of Europe, doesn't seem to be alleviating their poverty to the extent Sachs' theory would suggest.

Regarding trade, the poorer nations perhaps don't need to concern themselves with international trade: they don't have adequate internal trade, or coherent institutions of property and markets within their own borders. If these countries cannot facilitate the development of the institutions of trade between their own internal constituencies (eg., de Soto's "Mystery of Capital"), they're in no place to have coherent policies of international trade, regardless of any geographic advantages or disadvantages. Geography does create a constraint set for actors in the market, but an accomodating market structure allows individuals the space to address those constraints.

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