Seminar CRENoS-DECA - Marco Percoco

12/04/2010 - 15:00 to 17:00

Aula Magna, Faculty of Economics, Viale Sant'Ignazio, 74. Cagliari

Presentation of the paper
The Fight Against Geography: Malaria and Economic Development in Italian Regions
Marco Percoco
Università Bocconi 
Geography has long been considered as a fundamental prerequisite for economic development and growth. As reported by Sachs and McCord (2008), Adam Smith argued that high transport costs were at the heart of Asian and African underdevelopment. In this respect, theories of economic geography have only recently introduced transport costs into models of economic growth by looking at firm location choices and the spatial concentration of economic activities as depending on the accessibility of places (Krugman, 1991).
In recent years, a growing number of papers have begun to consider the role of physical geography as a determinant of economic growth and regional development by considering geography as a source of “intrinsic geographical advantage” (Sachs and McCord, 2008). Malaria is considered to be strictly related to poverty (Weller, 1958) and it is now widely recognized its geographically-related origin (Gallup and Sachs, 2001). The World Health Organization is currently setting a series of policies aiming to eradicate the disease from Africa, with the specific goals to preserve human lives and possibly to boast economic growth in those areas. Of the several malaria parasites, the worst, Pasmodium falciparum, has infested Italian regions for centuries until the complete eradication occurred in the 1950s. In this paper we provide and empirical assessment of the economic outcomes of malaria eradication in Italian regions. By making use of both macroeconomic and microeconomic data, we find support to the theory for which malaria eradication boost productivity growth and that in the long run lead to an increase of human capital. In particular, by making use of standard growth regressions, we find that the eradication of malaria increased the growth rate of Center-Southern economies by 0.94% per year. In addition, by adopting a difference-in-difference approach in a pseudo-panel framework, we find that the defeat of the disease increased education by 1.39 year per capita, with a slightly larger impact for males (1.9 years per capita) than for females (1.01 years per capita).
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