IQ-GDP III: Causality

Lynn and Vahanen’s “IQ and the wealth of nations” is extremely controversial for two reasons: It reports very big differences in average IQ between nations and it implies that these differences matter for economic success. This goes against two cherished dogmas in the Western world: That all peoples are equally capable and that the poor countries are poor due to the vagaries of geography/history and the perniciousness of the imperialist West.

People were quick to point out, that the correlation observed between national IQ and GDP does not prove a causal connection from high IQ to economic success. While it is plausible that smarter people are more economically productive, it is also true that being poor is coupled with malnutrition, disease and lack of education, all of which are known to suppress IQ. The Flynn effect is a powerful proof, that populations who reduced all these negative factors, also see large IQ rises.

If causality can go either way, the best way to find out the truth would be an intervention study. Just choose several countries that are culturally and ethnically similar and also have a similar history. Then randomly select half of these countries to receive a huge external boost to their GDPs. After a few generations we check whether increasing GDP has increased IQ and to what degree.

This is basically the story of the Arab league [1].

The Arab league consists of 22 members, with GDP per capita ranging from 2300 dollar for Yemen to 124,529 dollar for Qatar. The clear GDP divide isn’t between the sand Arabs and the oil Arabs, but rather between the gulf states that have (or in the case of Bahrain: had) oil in such abundance, that they all are at least twice as rich as the best of the rest.

The gulf states in blue, the rest in red.

For 16 of these 22 countries I possess IQ and GDP data. The GDP data is from 2017 and none of the mean IQ values are estimated from neighbouring countries. This is done for some countries in the database, but it would be fatal for our current endeavour.

So let’s see whether our intervention had the desired effect:
The average IQ of the poor Arabs is 83.8 while the average IQ of gulf Arabs is 82.6.

That looks rather like wealth has a slightly negative effect.

But maybe it is a specific cultural thing that the GDP-IQ relationship doesn’t hold in Arab countries?
Well, in fact the correlation of IQ and GDP among the non-gulf Arab states is 0.754 with p<0.011. It is only when we add the gulf states to the mix, that the correlation completely vanishes.

If the causal direction was from GDP to IQ, we would expect the correlation to get stronger as we add countries that got rich via natural resources, finance shenanigans or other windfall, because this increases the range of GDP values.

If the causal direction goes from IQ to GDP, we expect to see the opposite. The correlation would be strong in subsets of countries that earn money via industrial production and would weaken when we add countries that got rich in a more random fashion. This is what we observe in the Arab countries. But it actually holds all over the world, except in Africa. Possibly, because only in Africa malnutrition and disease is so bad and industrial production so non-existent, that the causal direction from GDP to IQ is stronger than in the other direction.

Correlation and p-value changes, when we filter communists, tax havens, tourist destinations and countries rich in natural resources, from unfiltered to filtered:

Americas: (0.57, 0.0018) –> (0.78, 0.00022)
Asia: (0.23, 0.155) –> (0.849, 0.00024)
Europe: (0.497, 0.0097) –> (0.727, 0.017)
Africa: (0.65, 9.741e-06) –> (0.57, 0.0025)

I used data freely available on wikipedia (or sources like worldbank) to determine which countries is either ex-communist [2], or a tax haven [3] or gets a substantial percentage of GDP from tourism or natural resources. So my filtering is a pretty blunt instrument. The effect would probably be even stronger if I checked whether a country is actually rich in the context of the region, and only then looked for a non-industrial reason.

I also want to disclose that depending on which IQ database one uses, the Americas correlation can see a minimal drop after filtering. Given the developmental status of South and Middle America, this doesn’t impact the argument. And in fact we are going to take a close look at South and Middle America in the very next blogpost.

[1] The Arab league
https://en.wikipedia.org/wiki/Arab_League

[2] Communist states
https://en.wikipedia.org/wiki/Communist_state

[3] Tax havens
https://en.wikipedia.org/wiki/Tax_haven

2 thoughts on “IQ-GDP III: Causality

    1. The main IQ database is continually updated, but of course it still also contains older studies. There are also databases based on PISA and similar education assessment studies. These are often more recent, have better sampling and fewer methodological issues (no Flynn effect correction). In my next post I use one of those databases. I’ll probably write a post on the different databases one can use, but the important thing to know is, that they all correlate very strongly with each other, so if you look at enough countries the results don’t change between databases.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s