Abstract

Earlier work has shown the importance of Atlantic Western Europe in determining modern economic growth and the geographical distribution of world output. Here we investigate why this particular set of countries emerged as leaders in open ocean navigation and naval warfare, as opposed to Asia or the rest of Europe. We show how the economics of transport in the era preceding open ocean navigation interacted with geographical features to give rise to differential economic and political institutions and incentives across regions. This determined the locus of innovation in ocean navigation and the distribution of benefits.