These differences are far from randomly distributed over the globe. Economic success and failure vary dramatically according to geography. Almost all countries in the geographical tropics are poor, and almost all of the wealthy countries are nontropical. Secondly, coastal countries are richer than landlocked countries. Looking at the density of economic activity within as well as between countries shows these patterns even more sharply.
Tropical regions are less conducive to economic development for at least two reasons.
Of the tropical diseases, the most important in terms of economic impact is malaria. Coastal access is important for economic development because of the persisting central role of seaborne shipping in world trade. The development of export manufacturing has been the one reliable route to sustained rapid economic growth for developing countries in the post World War II period. As we show theoretically in the paper, labor intensive manufacturing exports are exquisitely sensitive to transport costs because of the typically high content of imported intermediate goods. The higher the value of imported intermediate goods, the smaller the ratio of domestic value added to transport costs.