The Diffusion of Development Enrico Spolaore Romain Wacziarg

Enrico Spolaore Current Positions and Affiliations Tufts University, National Bureau of Economic Research (NBER), CESIfo Economics & Politics Co-editor, since 2006 Education Harvard University, Ph.D. in Economics, 1993; A.M. in Economics, Università degli Studi di Siena, Siena, Italy Dottorato di Ricerca in Economia Politica, Università degli Studi di Roma “La Sapienza,” Rome, Laurea in Economia e Commercio, summa cum laude, Publications The Diffusion of Development Quarterly Journal of Economics, forthcoming, May 2009(with Romain Wacziarg). Civil Conflict and Secessions Economics of Governance, vol. 9(1), pages 45-63, January 2008 Research interests Political Economy, Growth and Development, and International Economics.

Romain Wacziarg Experience: Associate Professor of Economics, Anderson School of UCLA Stanford Graduate School of Business Research Associate at the National Bureau of Economic Research (NBER), Center for Economic Policy Research (CEPR), a consultant for the World Bank and the French Ministry of Finance. A citizen of France, born in Switzerland, raised in India and France, Professor Wacziarg moved to the United States in Education Ph.D. Economics, 1998, Harvard University M.A. Economics, 1996, Harvard University M.A. Economics, 1992, Universite Paris-Dauphine B.A. Economics and Public Policy, 1990, Institut d'Etudes Politiques de Paris

Romain Wacziarg Interests: Growth, Political Economy, International Trade, Globalization, Economic Development, Ethics, Strategy, International Finance, Macroeconomics Recent Papers: Romain Wacziarg & Enrico Spolaore. (May, 2009). The Diffusion of Development. forthcoming, Quarterly Journal of Economics, vol. 124, no. 2 Peter Lorentzen, John McMillan, Romain Wacziarg. (2008). Death and Development. Journal of Economic Growth Romain Wacziarg and Karen Horn Welch. (2008). Trade Liberalization and Growth: New Evidence. World Bank Economic Review

Introduction Objectives: propose and test the hypothesis that differences in human characteristics transmitted across generations can affect income differences by creating barriers to the diffusion of development (innovation). Marginal contribution: firstly discuss the relationship between genetic distance and differences in income per capita across countries.

Main findings : a. Genetic distance: statistically and economically significant positive relationship between measures of genetic distance and cross- country income differences; b. The effects: not only contemporary, but also historically; c. The effects are larger when geographically closer; d. The effects also hold within Europe.

Structure: Section 2: a) link between genetic distance and distances in VTCs; b) link between differences in VTSc and the diffusion of innovations across countries; Section 3:data and empirical methodology; Section 4: presents the empirical results; Section 5: Conclude.

Theoretical Framework 2.1 VTCs, genealogical Distance and the Horizontal Transmission of Innovations Result 1: On average, greater genealogical distance is associated with greater cultural distance. Result 2: Income difference across populations are increasing in genealogical distance if and only if there are positive barriers to the diffusion of innovation and populations diverge over time.

2.2 VTCs and Income Differences: A general taxonomy

Data and Empirical Methodology 3.1 Data Genetic distance Geographic distance 3.2 empirical Methodology

Conclusion Differences in income per capita across countries are positively correlated with measures of genetic distance between populations; Genetic distance bears an effect on income differences even when a large set of geographical and other variables are controlled for; The patterns of relationships holds contemporarily and historically, as well as within Europe; Similar patterns hold when the dependent variable is differences in human capital, institutional quality, population growth and investment rates.

Future extensions 1.While our analysis provides a general macroeconomic framework to interpret our empirical findings, the study of the specific microeconomic mechanisms through which the effects operate is left for future research. 2.Another natural extension of our work would be to investigate whether and how genetic distance affects bilateral exchanges and interactions between different groups and societies, both peacefully (e.g., trade, foreign direct investment) and non-peacefully (conflict and wars) 3.Finally, it would be interesting to link our results to the vast literature on demography and economic growth, and explore the connections between genetic distance, intergenerationally-transmitted characteristics, and demographic patterns.

Policy implications: encourage policies that reduce such barriers, including efforts to translate and adapt technological and institutional innovations into different histories and traditions, and to foster cross-societal exchanges and openness.