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Climatic determinism or environmental determinism is an aspect of economic geography. Also sometimes called the equatorial paradox. According to this theory, about 70% of the economic development of a country can be predicted from the distance between that country and the equator. In other words, the further from the equator the more developed a country tends to be. The paradox applies equally well both north and south of the equator. Australia, for example, has a higher level of economic development than Indonesia. The paradox also applies within countries - the northern U.S. states are more developed than the southern U.S. states.

Singapore is a notable counter-example: it is located at 1.22° N and is one of the world's most prosperous countries. This prosperity is based on its position as a port. Other exceptions to the paradox tend to have large natural resources. Saudi Arabia is a good example.

One popular theory to explain this phenomenon is that development is less necessary in tropical regions - "you can lie in a hammock and pick bananas," as opposed to the need to invent agriculture and economy in order to prosper and survive. This explanation, while convenient, may not be sufficiently complex to truly explain the equatorial paradox.

It is noteworthy that the equatorial paradox only emerged from the Modern Era onwards, with more highly developed cultures and economies being present in the tropical and subtropical regions than outside it. In the context of a statistical analysis, the paradox is probably more a consequence of subjugation and colonization. The latter all but arrested economical ands infrastructural development, except as needed to fulfil the colonial power's aims.

Considering, for example, that at least 2 major Native American cultures were part of economical networks that was arguably as highly developed as that of contemporary Europe (albeit according to different priorities), with a sophisticated industry, monopolization, centralized economical and political structures, and a vast trade network, but were all but wiped out after 1530, it becomes clear that the phenomenon may be nothing but a historical coincidence.^{[citation needed]}

Climatic Determinism was intensely studied by Ellsworth Huntington.