Everything You Know about Development Economics is Wrong

by Daniel Seligson

(Note: So much good academic work gets censored today. Good luck having a career at Stanford if your explanation for third world poverty is anything more complicated than “Colonialism Bad.” As such, I’m trying to publish accessible versions of heretical scholarly work here in Restoration. Dan is a brilliant scholar, and I envy the publishing house that wins the contract for the book-length version of this work.

—Ayaan)

What makes some nations rich and others poor? It’s an ancient problem, still open and much discussed by scholars and the public with some consensus. It is widely taught, for instance, that formally documented institutions like property rights, universal voting rights, and the rule of law are the rules of the game, meaning that they determine economic outcomes. Also, it’s taught that international trade and domestic policy matter a great deal, and that climate and culture matter very little except where European cultures once collided with indigenous ones. These ideas inform all domestic and foreign policy making, as well as foreign aid spending which totals over $60B annually in the US. Sadly, this conventional wisdom is all wrong. Instead, climate and culture matter a great deal and the impact of European colonialism is, though not daisies and sunshine, much misread.

What evidence do we have that the consensus is all wrong? Since the end of World War II, we’ve seen the decolonization of Africa and much of Asia, the writing of more than 100 new national constitutions, and globalization on a grand scale. All of these bear heavily on trade, domestic policy, and formally documented institutions.

If the consensus were sound, then between 1950 and the present we’d have seen a lot of change in how wealth is distributed around the world, but we don’t. In the maps of development in 2018 and 1950 below, each country is colored bluish or reddish according to how far it is above or below the global average. The maps are remarkably similar, and the differences are most apparent in states that became oil-rich or those that underwent communist revolutions or counter-revolutions. Looking back to 1870, there’s less data, but the message is the same; the distribution of wealth among nations changes on a centuries-long time scale, not on the much shorter time scale of institutional or policy change. Can things that change quickly be the cause of things that change slowly? No, so the consensus that institutions and or policy are the rules of the game cannot be correct.

Development Index, 2018

Development Index, 1950

The maps show development by country in 2018 (upper) and 1950 (lower). Red signals that development is below the global mean and blue above. The deeper the color, the farther above or below.

If the consensus is wrong, what explains the global distribution of wealth? Look at the first of the two maps. One way to read it is that hot countries are poor unless they’re rich in oil, and cold countries are rich unless they’re rich in communist history. The idea that temperature matters for culture and development dates back 2400 years to Aristotle. That idea had legs, not only because great social philosophers of every epoch have embellished it, but because temperature influences, at the very least, the crops we can grow, the animals we can raise, the diseases that flourish, and the amount of work we can do. The postwar consensus favoring institutions and policy is dismissive about the role of climate, but as already noted, that consensus doesn’t hold up because the timescales for institutional and policy change are short and the timescales for institutional and policy change are short and the timescales for developmental change are long. Let’s take a fresh look at how temperature might bear on development.

Things fall apart. Paint peels, roads crack, and machines wear out. Fruit rots, too, and it rots faster in the summer than the winter. Now imagine two economies that differ only in the rates at which their things decay. The one whose things degrade more slowly will accumulate more and be wealthier. These degradations are chemical reactions that run faster at higher temperatures. At Earth-like temperatures, according to Arrhenius’ Law of 1889, these rates increase about 7% per ℃, and warmer countries ought to be poorer than colder ones by about 7% per ℃. In reality, it’s closer to 3 than 7 because, for instance, we have learned to thwart Nature by storing food in caves. This explains the 2400 year old mystery of why hot countries are poor and cold ones rich.^[1]

But there is a bigger mystery, and that is persistent poverty in a large group of countries variously called the “Global South” or the “Third World.” One line of argument takes its cue from the fact that almost all of these nations were once colonies of Europe. By its logic, former colonies were rich once but are poor today because Europeans mined their wealth, sowed social division, and left behind societies without good institutions. A second line of argument takes its cue from celestial mechanics. Earth is closer to the sun during the southern hemisphere’s summer. That fact and topographic details of the Earth’s surface conspire to make the southern hemisphere warmer than the northern one, and by Arrhenius’ Law, poorer. These origin theories are plausible but they predict much less impoverishment than is observed. Worse, neither theory explains why, as is evident in the maps above, development increases steadily from Africa eastward to South America. Something else then, something that is not part of the usual discussion about the wealth of nations, is at work in the Global South, but what?

Consider Charles Darwin’s 1871 observation that the atom of primeval human society was a horde whose one male leader jealously guarded his many mates. Darwin’s horde was a harem by another name, and he implies that reproductive success in haremic or polygamous society favors the jealous. Jealousy may be good for an individual’s reproductive success, but does it make society better off?  Doesn’t jealousy promote distrust, the solvent of social cohesion?

The prevalence of polygamy by country in 1900. The deepest red, in West and Central Africa, signifies that about 1 in 4 men have harems. Paler red, in China, corresponds to 1 in 15.

The map above illustrates the prevalence of polygamy in 1900. It is strikingly similar to the maps of development in 1950 and 2021. Is it causal or coincidental that the richest countries in the Third World, apart from those with oil, are in the Americas where harems were outlawed and monogamy was enforced by colonial governors more than two centuries ago? If polygamy does cause poverty, rather than the other way around, what’s the mechanism?

Three Problems with Polygamy

At least three different mechanisms operate in parallel. The first stems from the fact that the proportion of girls and boys at birth is about 1 to 1. If some girls of just marriageable age become second wives of older men, then an equal number of boys of that same age will not find wives until years later when younger girls become marriageable. In other words, polygamy creates a scarcity of marriageable females, a fact first documented in the scientific literature more than 300 years ago. It’s also true that more violent crime is commited by young, sexually mature males than any other cohort, and that unmarried males are more violent than others. Polygamy is a drag on development because it injects more violent crime into society than monogamy.

Marrying down (in age) to find a first wife would seem to aggravate the scarcity of marriageable females created by marrying down to find a second wife. Nevertheless, in haremic societies across Africa and Asia, almost all men marry. Where do the young brides come from? Births aplenty. A high birth rate society has many more young people than older ones. What connects polygamy and high birth rates?

Where goods are scarce, producers are encouraged by rising prices. In haremic society, where the scarce goods are marriageable females,  fathers receive a payment called a “bride price” when their daughters marry. This incentive encourages all men in such societies, whether they have harems or not, to keep their wives pregnant and to acquire more wives whom they can also keep pregnant. High birth rates, and low infant mortality rates thanks to vaccines, slake the scarcity in the marriage market, but they also produce unchecked population growth. In An Essay on the Principle of Population (1798), Thomas Robert Malthus explained how unchecked population growth leads to impoverishment and ultimately economic collapse. Much of Third World poverty is polygamy-induced Malthusian pressure at work.^[2] That is the second mechanism.

The third mechanism is of a different character. In Norwegian journalist Äsne Seierstad’s A Bookseller in Kabul, the bookseller’s wife cried for 20 days when she learned of his impending marriage to a girl less than a third her age. She suffers from what social psychologists have come to call second wife syndrome.
So reliably do second wives spell trouble in the household that in Arabic and in ancient Hebrew, a common word for second wife has a second meaning, trouble.  Large scale studies have compared husbands, wives, and children in harems to their monogamous counterparts within the same society, and those in harems fare worse in terms of disposable income, education, and physical and psychological health. Their psychosocial burden puts the rest of society at risk, just as a parent with mental illness puts his or her own children at risk. Polygamy tears away at the social fabric whose integrity is a precondition for development.

Polygamy prevailed in the Americas when Columbus made first contact five hundred years ago, a fact we know from 20th century anthropological surveys, but one we could have guessed from Darwin’s insight about the primal harem. Two hundred years ago, Europeans all but eliminated polygamy there, and today its former colonies have almost caught up with the West. The results of this natural experiment help make the case that the single most significant drag on development, and the most likely explanation of Third World poverty, is polygamy.^[3] Quantitative analysis puts climate, mined natural resources, and communism in a second category, and trade, topography, civil war, and some aspects of colonialism in a third. The import of these findings for the social sciences and for domestic and foreign policy cannot be overstated.

Much of this essay originates in my long collaboration with MIT Professor Anne E.C. McCants, a distinguished economic historian. We published the development theory in the Journal of Institutional Economics, and the study of polygamy in Social Science History. The latter was awarded the 2023 Founder’s Prize by the Social Science History Association.

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^[1] The two most frequently raised objections to this argument concern (1) things falling apart by processes related to freezing and subsequent thawing and (2) climate change. Indeed, when water in a roadbed or surface expands on freezing, it cracks the bed or surface, creating fissures for more water to get in at the next thaw, and do more damage on the next freeze. These are important where and when they are present, but they are not present in most places at most times. As for climate change, Earth’s mean temperature has increased about 1 ℃ in the past century, which is very small compared to the range of temperatures across the nations of the world. To date, global warming has had a negligible effect on the distribution of the wealth of nations.

^[2] Michèle Tertilt, the German economist who first quantified arguments like these in 2005, estimates that bride price acts to suppress individual incomes in contemporary polygamous societies by more than 40%.

^[3] To be absolutely clear, polygamy causes poverty and not the other way around. How can we be sure? Because polygamy is the primal state of our species, and 95% of all mammals, too. Poverty cannot cause polygamy because polygamy preceded wealth, poverty, and society as we know it. The best account of monogamy’s unwritten history is by historian Walter Scheidel. It appears to have first emerged in Athens about 2500 years ago.