Brown economists Louis Putterman and David N. Weil look at the power of regional origins:
The power of regional origins is illustrated by the fact that 44% of the variance in 2000 per capita GDPs is accounted for by the share of the population’s ancestors that lived in Europe in 1500.
I love the way they tiptoe around the elephant in the room:
Why should we care about the apparently powerful influence that population origins exert on country and sub-national incomes levels?First, if this influence is indeed as significant as our findings suggest it to be, then efforts to sort out the roles that geographic, institutional, and other factors play in explaining income levels and growth rates may produce misleading results unless we properly control for it.
Second, the influence of population origins suggests that there is something that human families and communities transmit from generation to generation — perhaps a form of economic culture, a set of attitudes or beliefs, or informally transmitted capabilities — that is of at least similar importance to economic success as are more widely recognized factors like quantities of physical capital and even human capital in the narrower sense of formal schooling. If we understand which culturally transmitted factors are important and what contributes to their emergence and propagation, we might be able to design policy interventions that could help less successful groups and countries to close their developmental gaps.
Razib of GNXP jokes, What is that mystery parameter?, while bolding this passage — there is something that human families and communities transmit from generation to generation:
I don’t doubt all sorts of implicit cultural norms, information, etc., are transmitted from generation to generation. But there’s also something else which is passed from generation to generation which might come to mind….