https://beyondtweets.substack.com/p/why-warm-countries-are-poorer
Hello friends,
I hope you had a great week.
This post is to answer a question that comes up with my wife and friends every time I find myself in a beautiful warm place (sometimes in Italy): is nice weather correlated with low economic development?
It’s a puzzle that always sparks debate but never seems to land on a satisfying answer. That’s why I found this post by Tomas Pueyo so cool when I stumbled on it. It pulls together a range of hypotheses, from temperature and disease to crops and colonization, into a coherent frame which finally gave me an answer.
This isn’t a new debate. Historians, economists, and even biologists have tried to explain the climate-prosperity paradox. Theories range from the influence of crops and trade to colonial legacies and institutions. But none of them alone fully explains why the global economic map looks the way it does: with the wealthiest nations clustered in temperate zones and many of the poorest in the tropics.
In this post, I want to explore the main hypotheses one by one. Some are straightforward, others less intuitive. None is conclusive, but together they sketch a pattern: constraint often builds systems that scale into prosperity, while abundance too easily allows complacency and extraction. And in closing, I’ll ask what happens now as climate change warms the planet.
Hypothesis A: Productivity Declines Under Heat
The first and most intuitive explanation is physical: heat makes people less productive.
There’s strong evidence for this. A large body of research shows that beyond a certain temperature, both physical and cognitive performance drop. Factories in hot climates face more downtime. Students in schools without air conditioning score lower on standardized tests. Construction workers reduce output in high-heat conditions, and even call center workers make more errors on hot days.
One study by Dell, Jones, and Olken estimates that each degree Celsius of annual temperature reduces GDP per capita by about 8.5% on average. Within countries, municipalities that are just a few degrees hotter than their neighbors tend to be consistently poorer. For physical labor, productivity can fall by 4% for every degree above 27°C.
Heat also has indirect effects. Crime rises in hot weather. Sleep worsens. Politicians’ speeches, as one paper documented, become measurably less complex and coherent as temperatures rise.
These might sound like marginal issues, but over decades, they compound into structural gaps. A worker who produces slightly less each day, or a student who learns a little less each year, adds up to entire economies lagging behind.
But heat alone can’t explain everything. If temperature was destiny, Singapore and Dubai would be hopeless. Instead, they show that with enough capital, technology, and infrastructure, you can counteract the heat penalty. Which makes this hypothesis convincing, but not sufficient. Cities below have very similar temperature but wildly different economies.
Hypothesis B: Humidity and the Dew Point
Heat is bad. Heat plus humidity is worse.
As Pueyo notes, high dew points prevent the body from cooling itself. Sweat doesn’t evaporate, which makes hard work unbearable. That creates the impression of “laziness” in hot, humid societies, but it’s a physiological constraint.
Humidity has other economic costs. It accelerates the decay of infrastructure—mold in buildings, corrosion of equipment, faster wear and tear on machinery. It fosters disease, degrades storage, and reduces the shelf life of crops.
So while temperature sets a baseline drag, humidity adds another layer. It explains why some of the world’s most economically stagnant regions are not just hot but also humid: West Africa, Southeast Asia, and parts of Latin America.
Technology can offset this. Air conditioning reduces both temperature and humidity (I recently wrote a post on the importance of Air Conditioning for economic development). But historically, humid tropics had a built-in productivity disadvantage that cold, dry regions did not face.
Hypothesis C: Disease Burden and Biological Risk
Warm, fertile regions are breeding grounds for pathogens. Malaria, yellow fever, dengue, parasitic worms—all thrive in the tropics. Their economic cost is massive.
The World Bank estimates malaria alone reduces sub-Saharan Africa’s GDP by 1.3% every year. In areas with endemic malaria, average incomes are less than a third of those in malaria-free regions. Children who survive frequent infections are more likely to suffer long-term cognitive and physical impairments. Families rationally respond by having more children, which spreads resources thinner and depresses investments in education per child.
Contrast this with cold regions. Frost kills pathogens. Each winter, disease pools reset, making epidemics less persistent. That gave temperate regions a structural health advantage long before vaccines or antibiotics existed.
History illustrates this starkly. Malaria was once common in Italy, Spain, and the American South. Its eradication in the mid-20th century coincided with faster economic convergence with northern counterparts.
Diseases alone don’t dictate prosperity, but they amplify climate’s impact. A farmer in northern France and a farmer in Ghana might face similar soil fertility, but one fights pests and parasites year-round while the other resets every winter.
Hypothesis D: The Surplus and Storage Barrier
This is the hypothesis I find most persuasive. Cold climates force planning.
When winter arrives, food production stops. Survival depends on storing surplus, preserving it, and coordinating its distribution. That necessity pushed societies toward inventing granaries, developing preservation techniques, and enforcing property rights. Over centuries, these behaviors scaled into sophisticated institutions: insurance systems, legal frameworks, and strong communal rules.
In warmer regions, nature is more forgiving. If a crop fails, you can replant next month. If stores run out, another harvest isn’t far away. The pressure to develop storage technologies or long-term planning systems is weaker.
That doesn’t mean warm climates can’t produce strong institutions. It means the incentive gradient tilts differently. When survival requires foresight, planning becomes embedded in the cultural and institutional DNA. When survival is easier, those muscles don’t develop in the same way.
You can see the legacy of this in Europe. Northern societies built elaborate insurance schemes and legal protections for property earlier than Mediterranean ones. Japan’s meticulous planning culture also reflects a survival imperative shaped by its climate.
Constraint hardwired systems that scaled. Abundance did not.
Hypothesis E: Abundance, Crops, and Colonial Institutions
Abundance often breeds extraction. Fertile river valleys or oil fields allowed elites to capture wealth without building broad-based systems, unlike harsher climates where survival required collective planning.
Crops reinforced the divide: grains like wheat and barley, common in colder regions, demanded storage, taxation, and coordination, while tropical staples like cassava or bananas were perishable and required less institutional infrastructure.
Colonialism then magnified these dynamics. In temperate zones, Europeans settled and built inclusive institutions; in hot, disease-ridden colonies, they imposed extractive ones that persisted long after independence. Together, climate, crops, and colonial legacies tilted many warm regions toward rent-seeking rather than institution-building.
Hypothesis F: Geography, Topography, and Connectivity
All the points above are reasonable and intuitive, yet interesting when put in a single framework. But the most interesting “new insight” for me was the correlation between topology and economic development.
The author of the post starts from looking at economies with a similar distance to the equator, but with vastly different GDP/capita. He has some very interesting visual ways of showing this, using Italy, Colombia and Mexico. Look at the maps below and see where people live, when considering altitude. Notice any difference?
Italy:
Colombia:
Mexico:
In Italy most of the population is on the coasts, while in Colombia and Mexico there’s a very high concentration of population in mountainous parts of the country. But why is this important?
Many tropical capitals sit at higher altitudes, not because of whim but survival. Bogotá (2,600 m), Addis Ababa, Mexico City, all cooler than sea-level alternatives, with lower humidity and fewer tropical pathogens. The logic is simple: if the lowlands are deadly, move uphill. But that move has economic consequences.
Those high places are safer from some climate burdens, fewer mosquitoes, lower dew point, temperate microclimates, but they are harder to connect. Infrastructure in mountains is costlier: roads require switchbacks, tunnels, retaining walls, steep slopes complicate drainage, and every link is vulnerable to landslides and weather. Pueyo emphasizes that mountains mean no navigable rivers, much higher transportation costs, and much less infrastructure.
Because infrastructure costs scale nonlinearly in difficult terrain, mountain regions often lag in connectivity. That means goods, people, information, and capital move more slowly. Trade shrinks. Market integration weakens. Economies stay local, insulated, and smaller.
Balkanization, conflict, and fragmentation
Isolation breeds fragmentation. Valleys and ridges create natural barriers; communities develop distinct social norms, languages, institutions. The cost of aligning systems (tax codes, contracts, legal standards) across terrain is higher. Pueyo cites the “Balkanization” effect: transport costs so high that people don’t move, trust across regions erodes, and local conflict becomes more likely.
He shows patterns in Latin America, Africa, and Asia: conflicts cluster along mountainous zones. Colombia’s cartels often operate in mountain terrain; Africa’s ethnic wars frequently trace the Rift Valley. The state’s reach is weaker in those zones, making enforcement of contracts, tax collection, and coherent institutions harder.
Isolation from maritime trade
Perhaps the most powerful dimension: mountain isolation often means disconnection from maritime trade. Coastal lowlands—even in warm climates—offer a pathway to global exchange. But disease-ridden coasts often deter settlement; hence many populations in the tropics have settled inland, in highlands.
Pueyo argues that many successful tropical nations overcame disease by establishing their administrative, commercial, and population centers in higher ground — but then paid the price in isolation from ports. Ports are gateways: they bring cheap access to foreign capital, ideas, technology, and large-scale markets. Being far from them is a persistent drag.
In sum: mountains provide a refuge from climate burdens but impose a tax in isolation. That trade-off matters. Warm lands near sea level suffer disease and heat; upland regions reduce those burdens but surrender trade connectivity and pay for infrastructure. Either choice skews growth.
This hypoteses looks solid when looking at several world maps:
A Web of Constraints
Looking across these hypotheses, what stands out is how they compound rather than compete.
- Heat lowers productivity.
- Humidity makes labor physically harder.
- Disease weakens human capital.
- Frost resets the pathogen clock.
- Crops and agricultural cycles shape institutional needs.
- Abundance fosters extraction.
- Geography sets trade costs.
- Colonial legacies amplify differences.
Each factor on its own explains a piece of the map. Together, they create the structural drag we still see today.
That’s why the global distribution of prosperity is so counterintuitive. It’s not that warm regions can’t develop, but that cold, harsh regions were forced into behaviors that scaled into institutions, while warm regions often were not.
But it’s also not fate. The exceptions prove the rule. Singapore engineered constraint through trade. Dubai bought it with oil rents and migrant labor. The U.S. South only fully caught up after the mass adoption of air conditioning.
Constraint can be engineered if nature doesn’t provide it.
Climate Change and the Future of Productivity
This history matters because the climate is shifting again. As the planet warms, some regions may slide down the productivity ladder.
- The IMF estimates a 1°C increase in average temperature in hot countries reduces growth by 1.3 percentage points annually.
- Crop yields are projected to fall sharply in tropical zones while rising in some temperate ones.
- Dengue fever and malaria are already expanding their range into southern Europe and the southern United States.
- Heat stress could make parts of South Asia and the Middle East periodically uninhabitable outdoors without cooling.
The correlation between warmth and stagnation might reassert itself in new ways. But unlike the past, we now have tools: vaccines, irrigation, trade, digital work, and especially air conditioning.
Adaptation speed matters. Here Europe provides a cautionary tale. As I argued in “Europe’s Strange War on Air Conditioning”, even wealthy societies can resist adopting obvious solutions. That reluctance shows how institutional friction can magnify climate constraints.
The 21st century version of this question is simple: can societies adapt their institutions and technologies fast enough to offset the warming drag?
Have a fantastic weekend,
Giovanni