Consistent with this explanation, countries that developed earlier are more spatially equal in their distribution of education and economic activity than late developers. To exploit urban scale economies, manufacturing agglomerated in relatively few, often coastal, locations. In late-developing countries, transport costs fell before structural transformation. When transport costs fell, these agglomerations persisted. For early developers, structural transformation due to rising agricultural productivity began when transport costs were still high, so cities were localized in agricultural regions. We show that this apparent puzzle is explained by persistence and the differential timing of technological shocks in the two sets of countries.

Correspondingly, the marginal effects of agricultural variables as a group on lights are larger in absolute value, and those for trade smaller, for early developers than for late developers.

In examining within-country variation in lights, among countries that developed early, agricultural variables incrementally explain over 6 times as much variation in lights as do trade variables, while among late developing countries the ratio is only about 1.5, even though the latter group is far more dependent on agriculture. We divide geographic characteristics into two groups, those primarily important for agriculture and those primarily important for trade, and confront a puzzle.

A parsimonious set of 24 physical geography attributes explains 47% of worldwide variation and 35% of within-country variation in lights. We explore the role of natural characteristics in determining the worldwide spatial distribution of economic activity, as proxied by lights at night, observed across 240,000 grid cells.

Global distribution of alpha + cities