Trade, Development and Genetic Distance

by on October 7, 2013 at 7:31 am in Economics, Science, Uncategorized | Permalink

Trade increases development but the main driver appears not to be comparative advantage and the standard microeconomic “gains from trade” but rather factors emphasized by Adam Smith and Paul Romer such as the increasing returns to scale that drives innovation and investment in R&D and also the ways in which trade increases exposure to and adoption of foreign ideas.

It’s much easier, however, to trade goods than ideas. The price of wheat shows strong convergence around the world by the 19th century but even simple ideas like hand-washing transmit much more slowly. Complex ideas like the rights of women, the rule of law or the corporate form transmit even more slowly. Thus, one of the barriers to development is barriers to the transmission of ideas.

Enrico Spolaore and Romain Wacziarg have done pioneering work uncovering some of the deep factors of development by using genetic distance as a measure of the difficulty of communicating ideas. Spolaore and Wacziarg have a short paper in Vox summarizing their methods and findings.

 [G]enetic distance is like a molecular clock – it measures average separation times between populations. Therefore, genetic distance can be used as a summary statistic for divergence in all the traits that are transmitted with variation from one generation to the next over the long run, including divergence in cultural traits.

Our hypothesis is that, at a later stage, when populations enter into contact with each other, differences in those traits create barriers to exchange, communication, and imitation.

…Our barriers model implies that different development patterns across societies should depend not so much on the absolute genetic distance between them, but more on their relative genetic distance from the world’s technological frontier. For example, when studying the spread of the Industrial Revolution in Europe in the 19th century, what matters is not so much the absolute distance between the Greeks and the Italians, but rather how much closer Italians were to the English than the Greeks were. Indeed, we show that the magnitude of the effect of genetic distance relative to the technological frontier is about three times as large as that of absolute genetic distance. When including both measures in the regression, genetic distance relative to the frontier remains significant while absolute genetic distance becomes insignificantly different from zero. The effects are large in magnitude – a one-standard-deviation increase in genetic distance relative to the technological frontier (the US in the 20th century) is associated with an increase in the absolute difference in log income per capita of almost 29% of that variable’s standard deviation.

Our model implies that after a major innovation, such as the Industrial Revolution, the effect of genealogical distance should be pronounced, but that it should decline as more and more societies adopt the innovations of the technological frontier (which, in the 19th century, was the UK). These predictions are supported by the historical evidence. The figure below shows the standardised effects of genetic distance relative to the frontier for a common sample of 41 countries, for which data are available at all dates. The figure is consistent with our barriers model. As predicted, the effect of genetic distance – which is initially modest in 1820 – rises by around 75% to reach a peak in 1913, and declines thereafter.

Figure 1. Standardised effect of genetic distance over time, 1820-2005

Michail Trepas October 7, 2013 at 8:43 am

From the Vox article:
“These differences could indeed reflect traits that are mostly transmitted culturally and not biologically – such as styles of communication, norms of behaviour, values, and preferences.”

This aspect of genetic distance reminded me of this index:

http://www.businessinsider.com/the-lewis-model-2013-9

prior_approval October 7, 2013 at 9:06 am

‘Therefore, genetic distance can be used as a summary statistic for divergence in all the traits that are transmitted with variation from one generation to the next over the long run, including divergence in cultural traits.’

Well, using the cited idea of hand washing, the practices between populations in Asia, Africa, Europe, and the Americas 5,000 years ago, 1,000 years ago, and 500 years ago would show that whatever the genetic distance, the importance of hand washing as an idea was roughly the same. Broadly speaking, that importance is tied to the actual empirically grounded reason why it makes sense, an idea which has spread over the entire globe, at least when talking about actual health care professionals.

But in the coming age of marketing, such thinking is quite backward. Using an example with a tengential relation to hand washing (clean water being necessary to prevent the spread of disease), there is a well documented case study of how an idea spread – bottle feeding infants, instead of using the mother’s breast milk. Regardless of genetic distance, Nestle has shown repeatedly just how possible it is to spread a complex idea. one which has been proven to be harmful in a number of cases (for a good overview – http://en.wikipedia.org/wiki/Nestlé_boycott )

One would think that a visionary author, proclaiming the future dominance of marketing in human affairs, would be a bit more aware of marketing’s power in terms of changing what had been a previously universal source of human infant nutrition into one that brings less benefits (exceptional cases to be noted, obviously), except for the profits of the company that cared nothing about such a stupid metric as ‘genetic distance.’

Ideas are not mutations, nor are they somehow metronomic in the rhythm they are created.

To be more pointed, considering just how the world we currently exist in has been a result of their existence, how large is the genetic distance between all the current and former owners of nuclear weapons in Africa, Asia, Europe, and America?

prior_approval October 7, 2013 at 9:10 am

Well, my apologies for a referencing error – Prof. Tabarrok is not a ‘visionary author, proclaiming the future dominance of marketing in human affairs,’ and thus cannot be blamed for apparently missing the point of a book he did not write.

Cliff October 7, 2013 at 11:05 am

Why the snark?

From your link “The widespread publicity led to the launch of the boycott in Minneapolis, USA, by the Infant Formula Action Coalition (INFACT) and this boycott soon spread to Australia, Canada, New Zealand, and Europe.” Hmm… just a random group of countries, I guess.

If bottle feeding spread from the U.S. to Africa, then to Europe, then to China, then to Australia, maybe you are on to something.

wiki October 7, 2013 at 10:08 am

Apparently you’re so eager to deface and troll MR’s comment section that you rush to continue your petty vendetta against Tyler without verifying the author of a post.

prior_approval October 7, 2013 at 11:26 am

And I even have the gall to note my mistake a minute later.

But to continue with what is apparently considered defacing, let me mock this statement, which it must be noted, was also not written by Prof. Tabarrok – ‘The effects are large in magnitude – a one-standard-deviation increase in genetic distance relative to the technological frontier (the US in the 20th century) is associated with an increase in the absolute difference in log income per capita of almost 29% of that variable’s standard deviation.’

The United States in the 20th century contained a large number of inhabitants, many with a greater ‘genetic distance’ than that between the British, Italians, and Greeks. And yet somehow, it was the nation which contains a great amount of ‘genetic distance’ that was able to create and spread a vast number of ideas – which it generally adopted or adapted from other places during the 20th century (the great waves of European immigration following WWI, the wave preceding WWII, and then various smaller waves during the Cold War – in DC, for example, Vietnamese and Central Americans as distinct groups tied to distinct events).

Mainly because the idea of ‘genetic distance,’ to the extent it has validity in any sense, involves multiple generations. Whereas the global spread of aviation, another profoundly complex idea, took place in a single life span. The Japanese were just as capable as the United States or Great Britain in building aircraft capable of flying from carriers, to cite one example from the 1930s – less than a generation after the first powered flight at Kitty Hawk. And depending on one’s view of history, the first jet was Italian (the first turbojet being German, admittedly).

Then there is the fascinating story of this man – ‘Igor Ivanovich Sikorsky (May 25, 1889 – October 26, 1972), was a Russian American aviation pioneer in both helicopters and fixed-wing aircraft. He designed and flew the world’s first multi-engine fixed-wing aircraft, the Russky Vityaz in 1913, and the first airliner, Ilya Muromets, in 1914.

After emigrating to the United States in 1919, Sikorsky founded the Sikorsky Aircraft Corporation in 1923, and developed the first of Pan American Airways’ ocean-conquering flying boats in the 1930s.

In 1939 Sikorsky designed and flew the Vought-Sikorsky VS-300, the first viable American helicopter, which pioneered the rotor configuration used by most helicopters today. Sikorsky would modify the design into the Sikorsky R-4, which became the world’s first mass-produced helicopter in 1942.’ http://en.wikipedia.org/wiki/Igor_Sikorsky

That’s right, the world’s first airliner was Russian – and yet, the same man, as an American, also created the world’s first mass produced helicopter. I wonder how one would measure the genetic distance in his case, and that between his birthplace and where he died? And let us not forget, that Sikorsky’s birth nation is still capable of manned spaceflight, whereas his adopted country has seemingly taken a break from pushing that particular technological frontier.

Vanya October 8, 2013 at 3:09 am

Sikorsky was born in the Russian Empire, but he was an ethnic Pole and born in Kiev. Not much of a genetic stretch.

msgkings October 7, 2013 at 2:38 pm

Your admittance of error doesn’t diminish wiki’s accurate portrayal of you as an obsessed, pedantic, vindictive troll. Which in the pre-internet era used to be called an ‘asshole’.

I know every response you draw only makes you happier, but sometimes it just needs to be said: you’re a dick.

wrparks October 7, 2013 at 10:20 am

No mention of Richard Dawkins meme in the article? Seems that would have been a fitting citation.

I suspect much of this is a proxy measure of historical racism and religious persecution.

Cliff October 7, 2013 at 11:02 am

I suspect it’s not

prior_approval October 7, 2013 at 11:38 am

Then explaining Sikorsky and the Imperial Japanese Navy Air Service (see comment above) and how such fits into this model should be a snap.

Just a little extra bit of information concerning the Japanese – ‘The Japanese military acquired their first aircraft in 1910 and followed the development of air combat during World War I with great interest. They initially procured European aircraft but quickly built their own and launched themselves onto an ambitious aircraft carrier building program. They launched the world’s first purpose-built aircraft carrier, Hōshō, in 1922.’ http://en.wikipedia.org/wiki/Imperial_Japanese_Navy_Air_Service

Z October 7, 2013 at 10:29 am

Stripped of all the jargon, the argument appears to be that similar demographic populations will share more readily their technological achievement than groups that are less similar with one another. If the cutting edge tribe happens to be related to your tribe, you’re in luck. If your tribe is a close link to the poo throwing nitwits, you’re not so lucky. At first blush, this seems like one of those things most people already knew in the late 19th century. This sort of observationalism has been banned for a long time so I suppose it is good news to see it making a return.

Somewhat related, I think the answer to why some populations punch well above their weight (English speaking people) and others well below their numbers (Chinese) is language. English is a highly flexible, but extremely precise language. English easily borrows handy foreign words and terms and avoid the vagueness you see in other languages. Context has little bearing on word meanings in English. That makes it a great tool for acquiring new knowledge and pass it on to the next generation.

whatsthat October 7, 2013 at 10:40 am

Is that true, context has little relevance for English?

Z October 7, 2013 at 11:34 am

It is probably better to say much less impact on word meaning than other languages.

prior_approval October 7, 2013 at 11:44 am

And yet, not that long ago, that sentence would have been easily written, in another country, with just a single change of language – ‘I think the answer to why some populations punch well above their weight (German speaking people) and others well below their numbers (English speakers) is language.’

But we all know what happened to the people that held that specific attitude, along with their delusions about their inherent superiority based on such things as language, don’t we?

Z October 7, 2013 at 12:25 pm

But it wasn’t and you are an ignorant troll. You would do yourself a world of good by putting yourself on listen mode.

Brian Donohue October 7, 2013 at 1:07 pm

Yup. They were smashed and humanity woke up and realized that all people are always and everywhere inherently equal and we’ll have nothing more to say on the subject.

whatever October 7, 2013 at 7:55 pm

I’m almost never in agreement with PA, but he has in this case a good point.

Linguists have known for a while that languages are not more complex or more suited for logic, or more suited for progress, or whatever is believed by laypeople at a given moment. (Romans thought you could only talk about philosophy in Greek, French or Germans in the Middle-Ages thought you could reason logically only in Latin, etc.)

A better case could be made that writing systems (alphabets vs abjads vs logograms, etc.) make communication easier or harder.

But not languages. Languages adapt and any concept expressed in one can be expressed in another. When the concept is useful, the language adapts to express it succinctly.

Children learn their native langue in about the same time, whatever the language. It’s only later that we see some languages as more difficult depending on our own history.

This doesn’t mean at all that all cultures are equal or equivalent. Just that it is not the language itself that makes the difference.

Z October 7, 2013 at 10:34 pm

Linguists are wrong. In fact, it is obviously so. The mere fact that languages do evolve and die out is all the proof you need. That which is not useful dies off along with the people reliant on it. On the other side, that which is superior and advantageous to those reliant on it thrive.

Gerard Mason October 8, 2013 at 6:57 pm

Indeed, and anyone with a passing knowledge of more than a couple of programming languages would also agree with that: just because it is *possible* to program something in a particular language [and in fact, sometimes, it isn't] doesn’t mean it’s easy to, and some languages are *much* better at expressing some things than others. The concept of ‘domain-specific languages’ (http://en.wikipedia.org/wiki/Domain-specific_language) formalises this notion.

To those who would argue that human languages are much richer and more powerful than computer languages, I would merely point out that any language has finite resources and must therefore make trade-offs, and different languages will do that differently.

*I* think that linguists say things like that because they are frightened of being called names by their students.

I wonder if De Morgan would have been able to work out how to distribute negation across conjunctions and alternations if he had been prone to negating simple propositions with double negatives?

Matt October 7, 2013 at 4:56 pm

I think the argument is more along the lines that, if you have a close genetic distance to another group, then you’re probably less culturally divergent than genetically more distant groups, because you’ve either had less time to genetically drift and culturally diverge.

(Or, because you’ve constantly had a higher level of gene flow / admixture with that group, which requires cultural contact. Which the authors really should have said rather than presuming a clock like model, but which is perfectly compatible with their argument.)

Culturally close groups, as genetically close groups should be, will tend have a culture which is similarly receptive to and encouraging of technological advancement, so will all partake of technological advance together.

So it’s not that groups related to stone agers do less well than groups related to space agers mainly because the space agers share their tech more with closely related groups, as much as that groups related to space agers culturally tend to have more capacity to adopt the tech of space agers than groups related to stone agers (with some exceptions).

So Much For Subtlety October 7, 2013 at 5:50 pm

English is highly precise? Take a phrase like “Yeah right”. Now reproduce it in the tones of a cynical New Yorker, a breathless girl from rural Iowa who has just been given first prize for her pig, and an Upper Class English nitwit.

Notice none of those distinctions can be made on paper. English relies heavily on tone to convey things like irony which, in England at least, is very important in how the language is used.

Chinese certainly has a long history of punching above its weight. And I don’t think it is fair to say that it does not borrow words easily. As the Chinese for tank or vitamin or even Revolution shows.

Z October 7, 2013 at 10:38 pm

“Highly precise” does not mean always precise. All languages have their idiomatic expressions. All languages allow for a degree of deliberate ambiguity. English, buy nature, resists the ambiguity common in other languages.

Vanya October 8, 2013 at 3:12 am

Yup. Sure.

Andrew' October 7, 2013 at 11:53 am

” [G]enetic distance is like a molecular clock”

Show of hands for whom that made things crystal clear?

commentariette October 7, 2013 at 1:16 pm

Definitely not a good text. What it is trying to say is that mutations in a genetic sequence happen at some (probabilistically defined) rate. You can use this to study evolutionary processes – it’s called phylogenetic analysis and is a branch of computational biology.

So if you have two sequences, you can make a (very) rough estimate of when they diverged from a common ancestor. The bigger the difference (distance), the longer ago it was. You can do the same sort of analysis with non-biological data that “mutates” in predictable ways, like monks copying manuscripts.

I’m pretty far from convinced, just based on the excepts here. I don’t think distances can be estimated that precisely and I also suspect that given enough choice of metrics, you can get some correlations. I’d be surprised if you could make it work with many examples – say Arab/Indian/Chinese-centered world trade in the 1000-1400, later transitioning to Portuguese/Spanish domination.

Brian Donohue October 7, 2013 at 12:23 pm

This supports the declining worldwide GINI coefficient experience, which is the best news humanity’s had in a long time that nobody cares about.

Gerard Mason October 7, 2013 at 1:31 pm

The argument is simple.

1) The human genome contains approximately six billion nucleotide pairs (in cells with the full complement of 46 chromosomes).

2) Each cell division is accompanied by a handful of single-nucleotide errors (i.e., ones that escape fixing by cellular repair mechanisms; also a copy error can only change one of the four possible values for a nucleotide to one of the other three, not to something completely different) which are passed down to descendent cells (so that every cell in your body is slightly different from every other one, genetically, and is a node on a binary tree of distinct cell lines dating, eventually, all the way back to the first cell and its two daughters, and their daughters, etc. etc.).

3) That includes the germ cells that create sperm and eggs, so each child has not only a mix of chromosomes but an inheritance of errors copied from its parents, as well as new ones of its own.

4) Selection weeds out those that are maladaptive, more or less quickly according to how damaging they are; it also favours those that are adaptive, again, more or less quickly.

5) Thus there is a net genetic drift apart in populations that become isolated. Now the equations that govern how quickly maladaptive changes are eliminated and how quickly beneficial ones are distributed are well known, and are exact as long as they are allowed to operate for longish periods, e.g. thousands of generations.

6) So, by measuring genetic distance between populations, you can tell approximately how long they have been apart. There must be a good deal of estimation here, since the functions of all genes is not known, so you can’t necessarily tell whether they are beneficial, neutral or harmful, so you can’t know a priori which way they will go; but people look at well known sequences, ideally ones where there is a good deal of uniformity inside the populations to be compared but divergence between them.

prior_approval made the very good point about genetic diversity in the U.S., so I don’t think he can be an ‘ignorant troll’. I agree with him that this seems more like pseudo-science than science (apologies if that’s a wrong reading of his comment). On a related point: while I am completely OK with genetic distance between distinguishable populations, I am uneasy about the idea of genetic distance from a technological frontier — the technological frontier shifts so rapidly from nation to nation, continent to continent, that its movements can’t possibly correspond to significant differences between populations, there just isn’t time. There might be some validity in looking at populations that have never been at the technological forefront, however.

mike October 7, 2013 at 1:59 pm

What is the point about genetic distance in the US? Yes, the United States did have a large, distinct Sub-Saharan African minority population. And you know what? The cultural exchange of ideas in the United States, especially on the science and technology front, did not involve them at all. So the “genetic diversity” of the United States is a red herring in this case, and if anything the actual dynamics of said diversity support the authors’ conclusion.

wrparks October 7, 2013 at 4:38 pm

There are two major classes of genetic distance measures. Between individuals and between populations. This study is presumably between populations. So unless the authors excluded irrelevant immigrants the distance between populations is decreased in error. Populations with low migration by definition will have higher genetic distance. Though the number of immigrants would have to be massive to be detectable in a single time point.

So one immigrant can massively alter the transfer of technology but has near zero impact on distance measures for the population. Look at this from the perspective of history of colonialism and none of it is surprising.

Z October 7, 2013 at 2:58 pm

I made a point of flexibility of language. He responded with an allusion to Nazis. He is a troll.

Steve Sailer October 7, 2013 at 4:46 pm

It would be interesting to compare genetic distance to language distance. Does genetic distance provide us any retrospective predictive power that language distance does not? The two measures correlate positively, but there are a number of interesting test cases where they are strikingly divergent, such as Hungary, Finland, and Basque country.

Enrico Spolaore October 7, 2013 at 7:05 pm

Good question. In our article “The Diffusion of Development” (QJE, May 2009, http://sites.tufts.edu/enricospolaore/files/2012/08/The-Diffusion-of-Development.pdf ), Romain Wacziarg and I discuss the relation between genetic distance and linguistic distance, and study the effect of relative genetic distance on income differences when controlling for measures of linguistic distance (and religious distance) (pp. 504-514). We conclude (p. 512): “In summary, using the best available measures of linguistic and religious distance, the effect of genetic distance on income differences is reduced by about 12%, but the effect remains large and significant. Overall, these results are consistent with our interpretation: when we measure some specific differences in vertically transmitted traits, such as in language or religion, we obtain a reduction in the size of the coefficient on genetic distance, suggesting that genetic distance was capturing some of the barrier effects associated with differences in these vertical characteristics. However, the reduction is not large enough to suggest that genetic distance only captures the effect of linguistic and religious distance. On the contrary, the reduction is relatively modest, and the effect of genetic distance remains large and significant even when controlling for linguistic and religious distance. This suggests that language and religion are but two of the many vertical characteristics that differ across populations, and perhaps not the most important barriers to the diffusion of economic development.”

Steve Sailer October 7, 2013 at 7:13 pm

Thanks!

Larry October 7, 2013 at 6:36 pm

I wonder whether the barriers are interestingly high
- that do not involve cultural and/or behavioral change
- in relatively literate/online/urban communities

And is “fast food” an idea?

lords of lies October 8, 2013 at 3:55 pm

so basically diversity + proximity = war.

nothing like relearning the classics, over and over and over….

Enrico Spolaore October 9, 2013 at 4:46 pm

In fact, it does NOT seem to be true that diversity + proximity = war. In other work, Romain Wacziarg and I have studied the effect of genetic distance on international conflict. We find that populations that are genetically closer tend to be MORE likely to go to war with each other, for given geographical proximity. Here is a link to the paper: http://sites.tufts.edu/enricospolaore/files/2012/08/War-and-Relatedness.pdf.
This is not in contradiction with the result that genealogical relatedness implies lower barriers to the spread of ideas and innovations. We are more likely to learn from our “relatives,” but also more likely to fight with them than with strangers. In other words, barriers to the spread of “good” things (innovations and development) can also be barriers to “bad” things (conflict and wars).

Comments on this entry are closed.

Previous post:

Next post: