Does geography matter? Contributions of agriculture to economic development and growth: A counterfactual approach

Jared Diamond in his Pulitzer Prize winning book, "Guns, Germs, and Steel," attributes the differences in worldwide income and wealth largely to geographical advantages. He argues that Eurasian economies are further developed than others because they benefited fiom an environment easier to manipulate, especially in terms of animal and plant domestication. As a template for his theory, Diamond cites the divergent development paths of the Maori and the Moriori; South Pacific peoples that originated fiom a common ancestor but whose economies evolved in completely opposite directions as a result of the geographical attributes of the islands they came to colonize in isolation of one another. It is this claim that has led me to the topic of this paper. I aim to test the relevance of Diamond's hypothesis for countries of today. That is, is geography - proxied by agriculture - still crucial in steering societies onto a path of economic growth?