Why are some economies rich and others poor? The economics profession is divided between rival schools of thought that emphasise geography or institutions. This column assesses the relative importance of each using the interaction of history and geography. The answer raises major policy implications.

India’s trade liberalisation in the 1990s produced large gains, but it imposed significant costs of adjustment on communities with industries that lost tariff protection. A new study shows that those communities’ educational attainment lags behind the rest of India due to the intersection of trade adjustment, poverty, and schooling costs.

Raising incomes of the world’s poorest is about more than raising living standards. Poverty kills. This column discusses recent research illustrating the links between extreme poverty and early death.

Since World War II, civil wars have killed more people than interstate conflicts. Poverty and low income growth have long been suspected as important causal factors, and new evidence suggests that drops in income raise the likelihood of civil war. However, democratic institutions may significantly alleviate such dangers.

Many countries provide large in-kind transfers although standard economic theory says cash transfers would be more efficient. Here is some new evidence evaluating the many justifications for in-kind transfers; it seems paternalism is the most likely explanation.