Working Papers in Economics,
University of Gothenburg, Department of Economics

Abstract: The most important event in human economic history before the Industrial Revolution was the Neolithic transition from a nomadic hunter-gatherer lifestyle to sedentary agriculture, beginning about 10,000 years ago. The transition made possible the human population explosion, the rise of non-foodproducing specialists, and the acceleration of technological progress that led eventually to the Industrial Revolution. But the transitio n occurred at different times in different regions of the world, with big consequences for the present-day economic conditions of populations indigenous to each region. In this paper we show that differences in biogeographic initial conditions and in geography largely account for the different timings of the Neolithic transition, and thereby ultimately help account for the 100-fold differences among the prosperity of nations today. The effects of biogeography and geography on the wealth of nations are partly mediated by the quality of presentday institutions, but are also partly independent of institutional quality.

Keywords: geography; biogeography; institutions; economic growth; Neolithic transition; agriculture; development

JEL-codes: N00; N40; N50; O10; O30; O40

22 pages, First version: September 25, 2003. Revised: January 15, 2004.

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