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Determinants and Economic Consequences of Colonization: A Global Analysis

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Abstract

Research on economic growth suggests that the era of colonization has had an impact on the levels of economic development of countries around the globe. However, why some countries were colonized early, some late, and others not at all, and what effect these differences have had on current income, has not been studied systematically. In the first part of this paper, we show that both the occurrence and the timing of colonization can be explained by (a) differences in levels of pre-1500 development, (b) proximity to the colonizing powers, (c) disease environment, and (d) latitude. In the second part, we analyze the developmental consequences of colonization while taking the endogeneity of colonization’s occurrence and timing into account. Whereas naïve estimates can suggest large impacts, we find that neither the fact nor the timing of colonization affect income today once colonization’s impact on the composition of the population and the quality of institutions is controlled for.

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Paper provided by Brown University, Department of Economics in its series Working Papers with number 2012-5.

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Date of creation: 2012
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Handle: RePEc:bro:econwp:2012-5

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Postal: Department of Economics, Brown University, Providence, RI 02912

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Keywords: Colonization; Growth; Institutions; Pre-Modern Development; Migration.;

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  1. Gregory N. Price, 2003. "Economic Growth in a Cross-section of Nonindustrial Countries: Does Colonial Heritage Matter for Africa?," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 7(3), pages 478-495, 08.
  2. Olsson, Ola, 2009. "On the democratic legacy of colonialism," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 534-551, December.
  3. Graziella Bertocchi & Fabio Canova, 1996. "Did colonization matter for growth? An empirical exploration into the historical causes of Africa's underdevelopment," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 202, Department of Economics and Business, Universitat Pompeu Fabra.
  4. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, American Economic Association, vol. 95(4), pages 1190-1213, September.
  5. Oded Galor & Quamrul Ashraf, 2008. "Human Genetic Diversity and Comparative Economic Development," Working Papers, Brown University, Department of Economics 2008-3, Brown University, Department of Economics.
  6. Raphael A. Auer, 2012. "Geography, Institutions, and the Making of Comparative Development," CESifo Working Paper Series 3874, CESifo Group Munich.
  7. Diego Comin & William Easterly & Erick Gong, 2006. "Was the Wealth of Nations Determined in 1000 B.C.?," NBER Working Papers 12657, National Bureau of Economic Research, Inc.
  8. Clingingsmith, David & Williamson, Jeffrey G., 2008. "Deindustrialization in 18th and 19th century India: Mughal decline, climate shocks and British industrial ascent," Explorations in Economic History, Elsevier, Elsevier, vol. 45(3), pages 209-234, July.
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Cited by:
  1. Stelios Michalopoulos, 2012. "The Origins of Ethnolinguistic Diversity," American Economic Review, American Economic Association, American Economic Association, vol. 102(4), pages 1508-39, June.
  2. Olsson, Ola, 2009. "On the democratic legacy of colonialism," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 534-551, December.

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