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Genetics, Politics, and Economics Join to Solve Global Poverty

October 2006

STANFORD GRADUATE SCHOOL OF BUSINESS—In a world besieged by international terrorism, global poverty, and environmental degradation, scholars are recognizing that the only way to approach complex problems is through cross-disciplinary collaboration. Stanford's new Presidential Fund for Innovation in International Studies has begun supporting faculty from different areas in coming together to create new knowledge, courses, and colloquia. At the Graduate School of Business, one such faculty member is Romain Wacziarg, who is bridging the fields of population genetics, anthropology, political science, and economics to determine how cultural differences promote or hinder wealth creation across nations.

Wacziarg's most recent work relates genetic distance between populations to differences in economic outcomes, such as their income per capita, to better understand the process by which innovations diffuse from one culture to the next. He found that countries whose populations are the most remote genetically from the populations that developed major innovations over the past 200 years are the least well off. While geographical remoteness also plays a role, it is genetic distance that most strongly correlates with how rich or poor a nation will be. The research also suggests that the main way genetic distance hinders the diffusion of development is by creating cultural barriers. The greater the genetic distance, the greater the cultural barriers are to the flow of ideas and technologies.

Wacziarg, associate professor of economics, draws on the work of the Cavalli-Sforza Lab at Stanford, where Luigi Cavalli-Sforza and his collaborators have spent their lives gathering data on gene frequencies across populations worldwide. Such work has confirmed that humans originated in Africa and began dispersing from that continent tens of thousands of years ago. The research has demonstrated that the genetic distance between any two populations—can be determined by the degree of variation in neutral genetic markers.

"One such marker would be blood type, which is not affected by natural selection because it doesn't affect your stamina and strength and, hence, survival," Wacziarg explains. "Rather, blood type mutations develop randomly and then become diffused as populations grow and change, so they serve as good indicators of how genetically distant one group may be from another."

Genetic distance is therefore a good indicator of how long ago two groups went their separate ways. "Greater time apart corresponds with greater cultural differences between these groups also, because they've had a longer period in which to develop different languages, customs, norms, and habits," Wacziarg says.

Bringing economics into the equation, Wacziarg confirms that in Europe, for example, the correlations among genetic wealth disparities bear out both for north-south and east-west population comparisons. "Overall, you've got poorer people in the east in Europe, and richer people in the west. The genetic distance between a Slav and a Western European is one of the largest in Europe. You've also got populations in the south—Greece, Spain, Portugal—that are relatively poorer than the rest of Europe, and populations in the north that tend to be richer. And the genetic distance between these two areas is also correspondingly large."

Wacziarg is adamant, however, that such findings do not mean that certain groups are more genetically prone to wealth or poverty. "We're not looking at what kind of genes are involved, we're just looking at genetic distance between groups," says Wacziarg, who has conducted one study on the diffusion of development with Enrico Spolaore of Tufts University. "There have been tremendous reversals in fortune over time. A thousand years ago the richest countries were China and India. Europe was a mess—in the middle of the Dark Ages. If there were something genetic about being European that made you rich, one would suspect it would have made you rich consistently throughout time."

The relationship between genetic distance and economic status is a function of the closeness of a given group to the locus of an innovation or new invention—something he discerned by comparing the wealth of various groups in different time periods. "Europe in the 19th century benefited economically from developments that led to the Industrial Revolution, for example," he says. "People in China, say, who didn't have the same language, norms, habits, and values, took 150 years to start benefiting from those developments. They were physically and culturally far from the invention."

Given that higher levels of income are frequently associated with a better quality of life, recognition of the correlation between genetic distance and economic disparity can have important policy implications. "The extent to which genetic distance matters peaks shortly after there is a major innovation," Wacziarg observes. "This means that policies that promote globalization can make it much easier for people to share innovations more quickly. Self-imposed policy barriers to the exchange of goods, ideas, and financial flows break down. This ultimately leads to greater prosperity and the reduction of income differences among countries."

In a multi-year study supported by Stanford University's International Initiative, Wacziarg has paired up with a campus colleague, political economist James D. Fearon, to better measure cultural distance not only between countries, but also within them. The researchers also are exploring how cultural distance in terms of specific factors—such as religion and language—correlate with an expanded set of outcomes—such as political conflict, civil war, and the intensity of trade between countries. "Preliminary findings show that the more culturally related two countries are, the more vigorous the trade is between them," Wacziarg says. Fearon is continuing to explore a surprising finding from an earlier study that civil war correlates not with stark ethnic diversity within a country, but rather with conditions of poverty.

Wacziarg's interdisciplinary research is revolutionary in the field of economics. "In this field, the question of whether cultural differences affect economic outcomes is almost completely absent," he says. "This new research attempts to measure intangibles and provide numbers that show to what degree these factors are important."

Related Information

"The Diffusion of Development," Enrico Spolaore and Romain Wacziarg, Stanford Research Paper #1898R, 2006. Details

"Fractionalization," Alberto Alesina, Arnaud Devleeschauwer, William Easterly, Sergio Kurlat, and Romain Wacziarg, Journal of Economic Growth, June 2003.

The History and Geography of Human Genes, Luigi L. Cavalli-Sforza, Paolo Menozzi, and Alberto Piazza, Princeton University Press, 1994.

"Ethnicity, Insurgency, and Civil War," James D. Fearon and David D. Laitin, American Political Science Review, 2003.