Some places are less connected across space than others. North Korea is an extreme example. Robert Guest, author of Borderless Economics, explains:
Because North Korea shuts out people, it shuts out ideas. That's one big reason why it is a starving backwater. Its more open cousin, South Korea, which welcomes foreigners and sends hordes of students and businesspeople abroad each year, is 17 times richer.
People connect places. Migration is how ideas move. Another cost of isolation:
Two recent papers by Filipe Campante of Harvard's Kennedy School and Quoc-Anh Do of the Singapore Management University argue that geographically isolated capital cities are more prone to corruption. (This certainly fits with the anecdotal evidence of countries like Myanmar, Kazakhstan, and Nigeria, that have moved their capitals to more isolated locations.)
I theorize that the lack of churn (migration in and out of the community) allows social capital to accumulate. Ironically, the problem isn't a paucity of trust. The circle of power is too small to facilitate knowledge exchange with the rest of the world. You will deal only with people whom you have known for decades. Autarky is institutional poverty, the hoarding of a shrinking pie.
Time to put the above lens to work in order to solve a social science mystery. Big trouble in Little Portugal:
From the very beginning, and with unusual persistence, the Portuguese community in downtown Toronto set about recreating its motherland on Canadian soil. “They never really left home,” proclaimed the headline of a 1973 Weekend magazine article. Although many Portuguese have since spread throughout the Greater Toronto Area, Little Portugal remains the community’s spiritual center, and a strikingly realistic miniature of its namesake: squat, modestly sized houses, often with glazed tiles of the Virgin Mary beside the doors; little paved-over front yards; the alternately sweet and sea-salty smells of bakeries and fish markets; fado, the plaintive Portuguese folk music, booming out of storefront stereos and filling the streets.
But Toronto’s Portuguese brought something else with them: miserable academic performance. Although the high dropout rate among black students has grabbed headlines in recent years, prompting the creation of two Africentric schools in Toronto, it’s Portuguese who, according to a 2006 Toronto District School Board report, have the highest rate in the city: 42.5 percent. (Another report puts the number at 34 percent, but these estimates vary wildly over time, and the historical mean is closer to 40 percent.) That’s nearly 20 percent higher than the municipal average, and almost four times the rate for Chinese students. The Toronto Catholic District School Board doesn’t keep track of dropout rates by language group, but, according to a source in the TCDSB, their Portuguese students have the same problem.
While that 42.5 percent figure includes some Portuguese speakers from Brazil and Angola, the current generation of dropouts is, by and large, second- or third-generation Portuguese. According to the TDSB, just 17 percent of the children of Portuguese immigrants have a BA or higher level of education—the lowest number among second-generation Torontonians. In an Ontario-wide math test, 14 percent fewer Portuguese-language students reached the expected level of proficiency than the average Toronto student. Other studies indicate that only about one in 20 Portuguese Torontonians has a university degree, compared to the city average of one in four. Just six percent of Portuguese work in the professions, compared to 18 percent of all Toronto residents. And, defying the timeworn stereotype of upward mobility, the children of Portuguese immigrants do not make significantly more money than their parents.
Experts are perplexed. What explains the remarkable dropout rate? I think the answer is in the first paragraph of the quoted passage. Little Portugal is exceptionally parochial. The neighborhood is isolated, suffering from too much social capital. The situation is akin to the immigrants stuck in the Parisian suburbs. Higher education isn't worth much if you can't leave.