The rich heart of Europe
By Scott Sumner
Notice that major capital cities such as London, Paris, Madrid, Stockholm, etc., are much richer than the surrounding regions. There’s also a rich area centered on Europe’s two biggest ports (Antwerp and Rotterdam). Again, no big surprise. Nor is the wealth of coastal Norway, which is rich in oil. But I am sort of surprised by the richest area of all, right in the center of Western Europe.
This area includes Switzerland, western Austria, northern Italy and southern Germany. What’s going on there? It doesn’t seem to be cultural in any obvious way, as it includes both Nordic and Mediterranean elements. It also includes both Catholic and Protestant cultures. It includes successful countries and dysfunctional countries. So the quality of governance doesn’t seem like a complete explanation either. Indeed northern Italy is rich despite bad governance.
I recall that economic geographers used to argue that places like Bolivia and Afghanistan were poor because they were landlocked and mountainous. Well the rich heart of Europe is landlocked and mountainous. Yes, it has rivers, but that doesn’t explain why it’s richer than those regions that are closer to the coast, or which have lots of flat, fertile farmland. Nor has this region always been rich. Southern Germany only became unusually rich after WWII. I seem to recall reading that when British tourists took a Grand Tour through the Alps 200 years ago, the region was relatively backwards.
There’s only one thing that I can see that these regions have in common, they are all close to the Alps. Before seeing this map, if you had asked me which part of Austria I thought was richest, I would have guessed the eastern part, which is less mountainous. I knew that Lombardy was rich, due to companies that cluster around Milan, but didn’t know about the three other smaller Italian Alpine provinces.
So I offer this as a mystery to be explained. Why are areas close to the Alps richer than elsewhere? In earlier centuries, did the rugged mountains somehow prevent the development of the sort of feudal systems seen in farming regions, and instead instill rugged independence in their populations?
In the next map, the regions are broken down with finer detail. It seems to me that lots of the richer regions are right up against various mountain ranges. The far west of Italy, right up against the Alps, and also the northern Apennines in Italy. The Pyrenees region of northern Spain.