RankCountryGDP per capita 2007 1Qatar88320,78 2Luxembourg77766,19 3United Arab Em.51342,68 4Brunei50568,99 5Bermuda48867,42 6Norway48391,18 7Singapore44598,62 8USA42897,42 9Kuwait42061,18 10Ireland41635,31 11Iceand38196,59 12Switzerland37308,82 13Australia36302,66 14Canada36166,12 15Austria36026,75 16Netherlands34391,35 17 Denmark 34287,45 18Belgium33794,14 19Sweden32952,04 20Finland32481,02 Denmark: Limited natural ressources of historical importance; geographically small; surrounded by powerful nations... Prosperity a small miracle?
Why are European countries comparatively rich today? Proximate reason: Started growing earlier than all other countries on the planet; Denmark (DNK) late 19th century How was that possible? DNK adopted the Industrial revolution. How..? Universal education (early 19th century) was the facilitator Why then did DNK adopt education early on? The question.
OUTLINE The Danish Growth Miracle: A Theory Remarks on external validity of the theory Implications for the current political-economic debate
CountryCoast/areaPopulation in 2000 (1000s) 1Singapore0.274036 2Danmark0.175337 3Philippines0.1281222 4Kroatia0.104410 5Greece0.1010559 6Jamaica0.092615 7Estonia0.091379 8Mauritius0.091185 9Norway0.084492 10Japan0.08126729 Tabel 2. Top 10: Coast/Area Sources: CIA factbook, World Development Indicators
Initial condition: (Uncommonly) coastal Travel by sea; hunting and gathering (Tauber, 1981; Enghoff, 1994) Incremental innovation process: boat building, navigation (e.g., Hale, 1998) Result: Potential to become a nation propelled by international interaction – trade. This potential was realized …
Why was the trade potential realized? 1.Limited ressources (need is the mother of nessesity) 2.Limited market (small country) 3.Fortunate location: Europe (e.g., Diamond, 1997) End result: 1.Geography (Coast/Area) International Interaction and Trade
Implications of being a nation propelled by trade? A need to be open to new ideas (affects the percieved return to knowledge accumulation) Evidence? Archaeology, Anthropology (religion, pre Christianity), Technology adoption prior to formal schooling (i.e., before 1500) End result: Trade Cultural Opennes to new ideas (/high inherent return to knowledge accumulation)
Universal education; great idea, but not of Danish origin Key events: Protestant reformation (e.g., Landes, 1999; Becker/Woessmann, 2009) – 1530 in DNK; Enlightenment (e.g., Easterlin, 1981; Mokyr, 2005) - 1690-1800 E.g. Kirkeordinansen (1537); Forordningen om undervisningspligt på landet (1739); undervisningspligt såvel på land som i by (1814) Pre-existing high inherent return to knowledge accumulation in DNK Early adoption of universal education in DNK
Theory: Coastal (limited natural resources, location) Trade High inherent return to knowledge accumulation Early adoption of universal education Technology adoption and take-off
Cross country data: 1.Coast/area predicts cultural valuation of new ideas (and patents pr capita) 2.Coast/area predicts early (1910) school enrolment rates 3.Coast/area predicts GDP per capita in 21st area (via HC) 4.Coast/area predicts the size of the service sector CountryCoast/areaPopulation in 2000 (1000s) 1Singapore0.274036 2Danmark0.175337 3Philippines0.1281222 4Kroatia0.104410 5Greece0.1010559 6Jamaica0.092615 7Estonia0.091379 8Mauritius0.091185 9Norway0.084492 10Japan0.08126729
IMPLICATIONS FOR THE CURRENT POLITICAL-ECONOMIC DEBATE
Human capital seems to have been critical. Quantity in focus in the economic political economic debate. Perhaps time to consider educational institutions though (generalists vs specialists) Technology adoption has always been critical; not invention per se. In the economic-policial debate all focus seems to be on the latter however Services: historically critical, contemporarily critical. Not in focus in economic-political debate, which focuses on Industry