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Reversal Of Fortune: Geography And Institutions In The Making Of The Modern World Income Distribution

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  • Daron Acemoglu
  • Simon Johnson
  • James A. Robinson

Abstract

Among countries colonized by European powers during the past 500 years, those that were relatively rich in 1500 are now relatively poor. We document this reversal using data on urbanization patterns and population density, which, we argue, proxy for economic prosperity. This reversal weighs against a view that links economic development to geographic factors. Instead, we argue that the reversal reflects changes in the institutions resulting from European colonialism. The European intervention appears to have created an "institutional reversal" among these societies, meaning that Europeans were more likely to introduce institutions encouraging investment in regions that were previously poor. This institutional reversal accounts for the reversal in relative incomes. We provide further support for this view by documenting that the reversal in relative incomes took place during the late eighteenth and early nineteenth centuries, and resulted from societies with good institutions taking advantage of the opportunity to industrialize. © 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 117 (2002)
Issue (Month): 4 (November)
Pages: 1231-1294

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Handle: RePEc:tpr:qjecon:v:117:y:2002:i:4:p:1231-1294

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Call for Papers: Law and Economic Development
    by Peter Klein in Organizations and Markets on 2007-02-16 15:28:31
  2. Historical Population Estimates
    by Masa in Devecondata on 2007-05-20 15:28:00
  3. Instituições importam. Ou não?
    by Leonardo Monasterio in Blog do Leonardo Monasterio on 2007-11-16 15:57:00
  4. Institutions matter. Really?
    by Leonardo Monasterio in Leonardo Monasterio's Blog on 2007-11-16 15:31:00

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  1. > Environmental and Natural Resource Economics > Climate economics > Climate and development
  2. > Economic History > Long-term Inequality and Mobility
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