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INTRODUCTION
The causes of the inequalities in income and wealth between nations have been discussed for some two and a half centuries. In 1748 Montesquieu published De l'Esprit des Lois in which he proposed that temperate climates were more favorable to economic development than tropical climates. In 1776 this problem was discussed by Adam Smith in his Wealth of Nations, in which he proposed that the skills of the population are the principal factor responsible for national differences in incomes and wealth.
Since these early attempts to analyse this problem, numerous other theories have been advanced. These theories fall into four principal categories. First, climatic theories are still proposed. Their leading exponent in recent times is Kamarck (1976) who argues that tropical climates are unfavorable for economic development because the heat and humidity reduce the efficiency of working capacities, impair the productivity of the land and provide a favorable environment for debilitating diseases. This explains the difference between what is sometimes called "the rich north" with its temperate climate and "the poor south" with its predominantly tropical climate.
Diamond (1998) presents similar arguments on the crucial significance of climatic and geographical factors.
The second major contemporary explanation is "dependency theory". This proposes that the economically developed capitalist nations are responsible for the poverty of the underdeveloped nations because they dominate the world economy, force the rest of the world into economic dependency, and pay low prices for Third World agricultural products and natural resources. Some of the leading exponents of this theory are Frank (1969, 1996), dos Santos (1993, 1996), Wallerstein (1998) and Valenzuela and Valenzuela (1998); see also Seligson and Passˇ-Smith (1998).
Third, there is the neoliberal theory. This proposes that the major factor responsible for national differences in economic development consists of the presence of free markets as opposed to command, socialist and communist economies. Bates (1993) and Weede (1993) are leading recent exponents of this theory.
Fourth, there are a variety of psychological theories which argue for the importance of differences in attitudes, values and motivations. The first major theory of this kind was Weber's (1904) theory that the Protestant work ethic explained the more rapid economic development of northern Europe as compared with the Catholic south from the sixteenth century onwards. Later theorists in this tradition include McClelland (1976) who advanced the similar concept of achievement motivation. Several economists, while not endorsing the theories of Weber or McClelland, are sympathetic to this kind of explanation and propose what are generally termed "cultural" factors as major contributors to national differences in economic development. Landes writes of the importance of culture "in the sense of inner values and attitudes that guide a population" (1998, p. 516). Many economists have taken eclectic positions in which they argue that several of these factors contribute to national differences in incomes and wealth.
We believe it has never been suggested that national differences in intelligence might play some role in national differences in economic development. It is widely assumed that the peoples of all nations have the same average level of intelligence. For instance, Kofi Annan, the United Nations Secretary General, asserted in April 2000 that intelligence "is one commodity equally distributed among the world's people" (Hoyos and Littlejohns, 2000). It is known in psychology that this is incorrect and that there are large differences in average levels of intelligence between different nations. Reviews of the literature have shown that in relation to average IQs of 100 in Britain and the United States, the peoples of north east Asia have average IQs of around 105 and the peoples of sub-Saharan Africa have average IQs of around 70 (Lynn, 1991).
In view of these differences, it seems a reasonable hypothesis that national differences in intelligence may be a factor contributing to national differences in wealth. This is a promising hypothesis for two reasons. First, it is well established that intelligence is a determinant of earnings among individuals; and second, several studies have shown that the intelligence of groups is related to their average earnings. The earlier American research literature, up to 1970, on the relationship of intelligence to earnings among individuals was summarized by Jencks (1972) who concluded that the best estimate was expressed by a correlation of .35. Later studies have confirmed this conclusion. Brown and Reynolds (1995) examined the relation between IQ measured in early adulthood and earnings approximately 12 years later for samples of 24,819 whites and 4,008 blacks and reported correlations of .327 and .126, respectively. Hunter and Hunter (1984) report correlations between .25 and .60 for different types of occupations. Murray (1998) has examined the National Longitudinal Study of Youth sample for the relation between IQ measured in adolescence and income in the late twenties to mid-thirties and found a correlation of .37. Most students of this question have concluded that IQ is a cause of income because IQs are established quite early in childhood and predict incomes achieved in adulthood (Duncan, Featherman and Duncan, 1972; Jensen, 1998). It is estimated by Li (1975) that childhood IQ is correlated .83 with adult IQ. The relation between childhood IQ and adult income is present when parental socio-economic status is controlled (Duncan, Featherman and Duncan, 1972; Jencks, 1979).
The positive association between IQ and income among individuals led to the expectation that there would be positive associations between the average IQs of groups and their average earnings. We believe that the existence of such an association was first reported by Davenport and Remmers (1950) in a study in which the population units were the states of the United States. They obtained IQ scores from tests administered in 1943 to more than 300,000 young men in high schools and colleges as part of selection for placement in training programs for the armed services. The test was composed of verbal, mathematical and scientific items and was described as "a combination of a group intelligence test and a general educational achievement test" (p. 110). They calculated the average score for each state, examined this in relation to the state's per capita income and found a correlation of .81.
The positive relationship between the average IQs of groups and their average incomes has also been found in studies carried out in Europe. A study of the British Isles examined the relation between average IQs in thirteen regions obtained in the 1940s and 1950s and per capita incomes in 1965. The average IQs fell within the relatively narrow range between 102.1 in London and 96.0 in Ireland. The correlation between average IQs and incomes was .73 (Lynn, 1979). A similar study for France examined the relation between average IQs in 90 "departments" (regions) obtained from testing approximately 257,000 young men conscripted into the armed services in the mid-1950s and per capita incomes in 1974. The correlation between IQs and earnings was .61 (Lynn, 1980). The same relationship has been found in Spain in a study in which average IQs for 48 regions were calculated from approximately 130,000 military conscripts for the mid-1960s. The correlation between these and average regional incomes was .65 (Lynn, 1981). In view of these relationships it seems a promising hypothesis that a positive relationship would be present between the average IQs of the populations of nations and their average earnings. It is this hypothesis that we are now about to investigate.
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