Why are some countries wealthy and others still mired in poverty? Why are wars raging in some parts of the world, and others have been at peace for generations? What does the future hold for our interconnected but diverse planet?

Cal State Fullerton Economics Professor Sherif Khalifa examines the intersection of economics and geography in his new book, Geography and the Wealth of Nations. Khalifa argues that geography is at the heart of national economic performance, global integration, climate change concerns, geopolitical threats and opportunities, and more.

Khalifa recently shared some of the highlights of his book and its purpose with us.

What motivated you to write this book? How do you hope it will be utilized in practice?  

I grew up in the Middle East but lived at times in other parts of the world, including Western Europe, Sub-Saharan Africa and North America. I also served as a diplomat before working in academia. During that time, I traveled a lot and I observed with my own eyes the huge differences in living conditions across countries.

There are some countries that are wealthy and prosperous and others that languish in poverty.

These observations led me to wonder about the factors behind these variations in living standards. Why is it the case that people in some countries cannot even dream about what others take for granted in other countries? Why does it seem like we are living in two different worlds on the same planet?

These questions led me to the study of the deep determinants of economic development. In this field of study, scholars examine the factors that determine economic prosperity.

Studies in this field point our attention to the roles of different factors, such as the geographic, climatic and topographic features of a country; the quality of a country’s institutions or the systems that are intended to impose a structure on our economic, political, legal and social interactions; the country’s cherished cultural values and faith paradigms; the country’s system of governance and the extent of political freedoms and political stability; the level of a country’s ethnic and linguistic diversity and the likelihood of ethnolinguistic conflict; the extent of income inequality in a country and the degree of distributional conflict; the historical events that occurred long ago but continue to shape current outcomes; and the integration of the country into the global economy.

The core argument of this book is that behind all these factors, geography looms large. Thus, the book emphasizes that our natural environment has an indelible mark on all these factors that we believe are critical for economic performance.

From climate change to pandemics to geopolitical challenges, we are living in an era of global crises. You mention that your book discusses geographic determinants of crises. Please share a little about this. 

The narrative in this book can serve as a guide for us to comprehend the impact of our natural environment on every aspect of our lives, and for policymakers who continue to wonder about the best policies to implement to change their country’s economic trajectory given these specific challenges.

This is particularly important and pertinent as our world faces unprecedented natural challenges that include climate change, the surge in the severity of natural disasters, the depletion of natural resources, soil degradation, deforestation, the loss of biodiversity and others. This implies that we will not be able to respond appropriately to these imminent threats to our existence unless we understand their potential implications on our political, economic, legal, institutional, social and cultural structures. As we come to understand that any alterations to our natural surroundings have serious implications, then we can admit that these challenges are consequential and that we need to react accordingly.

The book also discusses the effect of some geographic characteristics on the likelihood of conflict; the outcome of warfare; the extent of political stability; the geostrategic significance of countries; a nation’s foreign policy and its spheres of influence; a country’s labyrinth of allies and foes; and the forms of political institutions.

This is particularly important in a world where the democratic system of governance is receding before an autocratic tide, where democratic institutions are facing serious challenges to their functioning; where our post-Cold War system is being replaced with a world of conflict reminiscent of that of the two world wars; where superpowers are involved in what some dubbed a second Cold War, while others describe it as a potential prelude to a third world war; where epidemics and pandemics are changing the political landscape; where food shortages and price spikes are leading to political instability in multiple areas around the world; and where climate change is expected to have serious consequences on our way of life.

What would you most like today’s students and recent alumni to understand about the intersection of global geography and economics? 

The book attempts to argue that there is an association between geography and economic outcomes, despite the arguments that claim otherwise.

The arguments against a geographic narrative of economic outcomes include three primary points of view. The first is that geography only affects economic performance indirectly through its effect on other factors that are more important but has no direct effect. The second is that this argument should not be taken seriously given the technological advances that allow humans to dominate their natural environment. The third is that admitting a geographic contribution implies that humans have no control over their destiny given that they cannot choose their natural surroundings.

To respond to the first claim, this book argues that we should not discount the contribution of geography by claiming it has only an indirect effect on economic outcomes. For instance, there is a consensus that the quality of institutions is indispensable for economic performance. But as much as it is essential to ascertain the economic effect of institutions, it is vital to know what caused institutions to be so different. As much as it is critical to know the economic consequences of some cultural traits, it is also important to understand why people cherish different values. As much as it is crucial to know the effect of historical events on current outcomes, it is also essential to learn what brought these occurrences about in the first place. As much as it is valuable to know the effect of integration into the global economy on economic outcomes, it is also beneficial to know why some communities are more engaged with other economies than others.

As for the second claim, on the potential of technology in allowing us to tame our surrounding environment, this book argues that the effect of geography was palpable in a period when technological knowledge was not developed enough to grant humans that power over nature. As such, geography influenced some of these factors whose effect persisted until the present day. For instance, this book investigates some historical events that took place centuries ago yet have a persistent effect on current economic outcomes. These events were induced to a large extent by the geographic environment at a time when technology was not advanced enough for humans to have a say in the course of these developments.

As for the third claim emphasizing geography’s effect means we have no control over our destiny, we can argue instead that bringing to light the compelling effect of these geographic factors can guide decision-makers in directions that can be overlooked otherwise.

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