Far-Flung Europe: What is the Economic Impact of Geography? John Luke Gallup jlgallup@pdx

1. Far-Flung Europe: What is the Economic Impact of Geography?John Luke Gallupjlgallup@pdx.edu

2. My Path to Geography • Why are LDCs poor and often slow growing? • Geographically isolated • Tropical climate

3. The Outermost Regions

4. My Path to Geography • Why are LDCs poor and often slow growing? • Geographically isolated • Tropical climate • Outermost Regions • Geographically isolated • Tropical climate (for French regions) • European institutions and investment

5. Cross-Country Evidence • Geographical isolation • Access to sea-born trade • Not distance per se • Tropical Climate • Disease, especially malaria • Low agricultural productivity, especially for staples

6. Robust Correlates of Growth

12. Tropical problems? • Not agriculture • Outermost regions are not growing staples • All have volcanic soils except French Guiana • Agriculture <= 4% of output (except for Azores, 10%) • Health • Not substantial mortality and morbidity due to tropical disease • All malaria-free except for French Guiana • There is no geography problem to explain for the economies of Outermost Regions

13. Issues for the Outermost Regions • Health • Manufacturing • Education • Unemployment

18. Manufacturing • Depressed by transportation costs • Manufacturing is about 15% of national output • It is less than half that level in Outermost Regions • A very small part of economy

19. Comparative Advantage • Tourism • Services tied to networks beyond regions • Capture benefits of globalization • Depends on • Participation in networks • Education levels

20. Education in Outermost Regions • Highschool dropout rates • Worst (or close to) of all regions of countries • Guadeloupe is exception: at national average • French Guiana and Azores are each worst in country by large margin • Enrollment of 17 y.o.'s 10% lower than any other region