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The bounty of the sea and long-run development

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Abstract

We document that a high level of natural productivity of the ocean—a rich bounty of the sea—has had a positive and persistent impact on economic development since pre-industrial times until today. In addition, we document that it is the bounty of the sea of the ancestors of current populations which drives the persistent effect, not geography per se. We argue that an explanation is that a rich bounty of the sea facilitated early coastal settlements and an early coastal orientation of pre-industrial economic activity. This gave rise to occupations outside of agriculture and capabilities that were complementary to early industrialization. In the long run this contributed to an early take-off to sustained economic growth.

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Notes

  1. By natural productivity we refer to eco-climatic factors that impinge on the productivity of agriculture or of the ocean. In the former case that chiefly involves soil conditions, temperature and precipitation, whereas it in the latter case involves sea temperature, salinity, sea depth and more. We return to the definition of the natural productivity of the ocean below.

  2. “As by means of water-carriage a more extensive market is opened to every sort of industry than what land-carriage alone can afford it, so it is upon the sea-coast, and along the banks of navigable rivers, that industry of every kind naturally begins to subdivide and improve itself, and it is frequently not till a long time after that those improvements extend themselves to the inland parts of the country.” (Smith 1776, Ch. 3). More direct evidence of the benefits of access to the sea is provided e.g. by Rappaport and Sachs (2003).

  3. To get a sense of how just how close these numbers are, note that the Gini coefficient can be interpreted as the expected income difference between two randomly selected observations, normalized to the overall average (Pyatt 1976). Hence, the expected income difference between two randomly selected areas across the world is 54% relative to mean income, whereas it is 51% across (very) coastal areas (<50 km). While average income rises when moving to coastal areas, income differences evidently rise almost proportionally.

  4. On the timing of the Neolithic and (early) development, see Diamond (1997), Olsson and Hibbs (2005), Putterman (2008), Ashraf and Galor (2011) and Chanda et al. (2014). The land suitability for agriculture and its impact on development has been examined by Gallup and Sachs (2000) and Masters and McMillan (2001).

  5. Key contributions include Engerman and Sokoloff (2002), Easterly (2001), Buggle and Durante (2017), Michalopoulos (2012), Alesina et al. (2013), Galor and Özak (2016), Michalopoulos et al. (2018), Talhelm et al. (2014), Olsson and Paik (2020), Bentzen et al. (2015) and Litina (2016).

  6. For example, consider the Matsuyama (1992) model, which is a standard two sector model featuring learning-by-doing driven endogenous growth (only manufacturing productivity grows), and non-homothetic preferences that generate Engel’s law. In autarky higher productivity in agriculture increases income and ultimately shift labor into the dynamic sector to the benefit of growth. In an open economy setting however, a sufficiently high level of agricultural productivity causes the economy to specialize in agriculture, choking off growth. If natural productivity of the ocean raises manufacturing productivity it would have a persistent positive impact on growth, whereas land productivity would start to decrease growth once globalization emerges, as it arguably did during the second half of the nineteenth century (e.g. Galor and Mountford 2008).

  7. Surveys are found in Spolaore and Wacziarg (2013) and Nunn (2014).

  8. In the Supplementary Appendix we provide further details on the raw data from AquaMaps.

  9. The 15 species accounted for 52% of the global marine fish catch according to the FAO FIGIS database, which reports the catch volume of fish landed by individual countries, by species or higher taxonomic levels, for the period 1950–2012. The list of these species is reported in Table A1 in the Supplementary Appendix.

  10. See the discussion and evidence by Sethi et al. (2010), Branch et al. (2010) and Pauly et al. (2013).

  11. The EEZs are prescribed areas by the United Nations and represent territories over which coastal countries have exclusive fishing rights and jurisdiction over natural resources, and that stretch up to 200 nautical miles from each individual country’s coastline. A shapefile for exclusive economic zones is found at http://www.marineregions.org/downloads.php

  12. The continental shelves are underwater landmasses that extend from the continents and end with a steep slope towards the deep ocean floor. The shelf is characterized by being relatively flat and located at depths no larger than 150 m.

  13. “Upwelling” is an oceanographic phenomenon that involves wind or current driven motion of dense, cooler, and usually nutrient-rich water towards the ocean surface, replacing the warmer, usually nutrient depleted surface water.

  14. Research has even documented how marine fish in higher latitudes are more mobile as they respond to seasonal changes in temperature, making them more likely to form tight shoals and thereby become easier targets for fisheries (Floeter et al. 2004).

  15. South East Asia has especially been identified as a center of evolution and specification of marine resources as it is home to some of the oldest marine ecosystems of the world (Ursin 1984).

  16. Major upwelling area are associated with the Canary (off Northwest Africa), Benguela (off Southern Africa), California (off California and Oregon), and Humboldt (off Peru and Chile) currents (King 2013). Nutrient terrestrial runoff is particularly associated with glaciated, high-latitude soils and, globally, the outflow of major rivers including the Ob, Mackenzie, Mississippi, Amazon, Parana, Congo, Tigris and Euphrates, Indus, Ganges, Irrawaddy, Yangtze, and Huang (Huston and Wolverton 2009).

  17. Note that similar concerns might be raised in the context of the selection of key crops for indices involving land suitability, see Nunn (2014, p. 370).

  18. The downside of this measure is, of course, that it may involve species that are exploitable only to a very limited extent, as reflected in a potentially very low level of global landings. Consequently, this measure may introduce noise, and make regression results sensitive to measurement error.

  19. To be sure, the extent of the EEZ is at times the source of conflict—the “cod-wars” between Iceland and England during the 1960s being a case in point. See Kurlansky (1997, Ch. 10) for a vivid account.

  20. Of the 15 marine fish species in the original Bounty of the Sea index only 12 are associated with nutritional values in FAO (1989). The species not included are the Gulf menhaden, Atlantic menhaden, and Alaska pollock.

  21. See the appendix for a description of these data collections.

  22. We disregard the 1940s in order to avoid how the Second World War hampered landings in an asymmetric manner.

  23. Collected by the Minnesota Population Center, this data contains census microdata from Canada, Great Britain, Germany, Iceland, Norway, Sweden, and the United States from 1801 to 1910. Important for this study is the reporting of individual occupation codes. Germany, which is actually just the region Mecklenburg–Schwerin, is left out in the present analysis.

  24. The subnational regions in the data set compare to the present day first-level divisions of these countries.

  25. The geographical coordinates of the ethnic group centroids are reported in the EA and SCCS. From this point we calculate the distance to the nearest coast and disregard those with a distance of more than 200 km. The use of 200 km as the radius within which the ethnic groups have been likely to move around follows Alesina et al. (2013).

  26. Specifically, the indices range from 0 to 9, where 0 represents 0–5% dependence, 1 represents 6–15%, 2 represents 16–25%, so on up to 8, which represents 76–85% dependence, and 9, which represents 86–100% dependence.

  27. It is interesting to note that the parameter estimate for absolute latitude is negative, suggesting greater economic development close to the equator in 1500 CE. This finding, suggestive of a climatic reversal in economic activity during the last half millennium, was first noticed in Ashraf and Galor (2011). See Dalgaard and Strulik (2017) for a possible explanation for the reversal, and discussion of alternative accounts.

  28. Throughout we include a control for being landlocked, which means we partial out the average difference in population density between coastal and non-coastal nations. When we exclude landlocked nations entirely we push matters a bit further by exploring the impact from the BoS index solely within coastal countries.

  29. If the measurement error (in the dependent variable) is classical, one would only expect to see more imprecisely estimated parameters, not changes in point estimates (in contrast to measurement error on the independent variables). A priori, however, the measurement error could be non-classical. Our results can therefore be interpreted as indicating that the measurement error on population density in 1500 CE is approximately classical in nature.

  30. With this approach we aim to demonstrate that our results are robust to the inclusion of the most commonly agreed upon determinants of pre-industrial development, at present.

  31. Estuaries are places where rivers run into the ocean and thus produce brackish water. In this empirical specification, shelf area constitutes the relatively shallow waters of up to 200 m in depth.

  32. Suppose the fraction \(\pi _{ij}\) of the population in country i descends from country j, the ancestor adjusted BoS index is calculated as \(\sum _{j}\pi _{ij}BoS_{j}\), where \(\sum _{j}\pi _{j}=1\).

  33. In the validation tests (Sect. 2.2.2) we documented that the employment rate of boat makers and ship workers is higher in coastal regions featuring a high bounty of the sea (cf. Table 2).

  34. This does not mean that the theory is inconsistent with the experiences of England. But by 1900 CE industrialization in England has had time to progress much further than in the remaining countries in the sample, for which reason it presents itself as an outlier.

  35. According to unified growth theory, the onset of the fertility transition marks the onset of modern growth, which thus represents our motivation for using this measure as a marker for the take-off to growth (see Galor and Weil 2000; Galor and Moav 2002; Cervellati and Sunde 2005; Galor 2011 for an overview).

  36. This is consistent with, though on the low side of, estimates found in Dalgaard and Strulik (2013) and Andersen et al. (2016).

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Funding

Pablo Selaya thanks the Danish Council for Independent Research for funding this research (Danmarks Frie Forskningsfond, Sapere Aude Grant No. 11-119834).

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  1. Department of Economics, University of Copenhagen, CAGE, and CEPR, Copenhagen, Denmark

    Carl-Johan Dalgaard

  2. Department of Economics, Harvard University, Cambridge, MA, USA

    Anne Sofie B. Knudsen

  3. Department of Economics, University of Copenhagen, Copenhagen, Denmark

    Pablo Selaya

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  1. Carl-Johan Dalgaard
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We would like to thank Quamrul Ashraf, Sascha Becker, Davide Cantoni, Matteo Cervellati, Melissa Dell, James Fenske, Oded Galor, Murat Iyigun, Robert Klemmensen, Marc Klemp, Omer Licandro, Anastasia Litina, Stelios Michalopoulos, Nathan Nunn, Karl Gunnar Persson, James A. Robinson, David N. Weil, Asger Wingender and seminar participants at Universidad Católica de Chile, Barcelona GSE, CESifo-Munich University, Brown University, National Graduate Institute for Policy Studies (GRIPS) Tokyo, University of Southern Denmark, University of Oxford, University of Luxemburg, and Trinity College Dublin, for helpful comments and discussions. Pablo Selaya furthermore thanks the Danish Council for Independent Research for funding this research (Danmarks Frie Forskningsfond, Sapere Aude Grant No. 11-119834).

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Dalgaard, CJ., Knudsen, A.S.B. & Selaya, P. The bounty of the sea and long-run development. J Econ Growth 25, 259–295 (2020). https://doi.org/10.1007/s10887-020-09181-8

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