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Geography vs. institutions at the village level

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  • Grimm, M.
  • Klasen, S.

Abstract

There is a well-known debate about the respective roles of geography versus institutions in explaining the long-term development of countries. These debates have usually been based on cross-country regressions where questions about parameter heterogeneity, unobserved heterogeneity, and endogeneity cannot easily be controlled for. The innovation of Acemoglu, Johnson and Robinson (2001) was to address this last point by using settler mortality as an instrument for endogenous institutions and found that this supported their line of reasoning. We believe there is value-added to consider this debate at the micro level within a country as particularly questions of parameter heterogeneity and unobserved heterogeneity are likely to be smaller than between countries. Hence, we examine the determinants of economic development across villages on the Indonesian Island of Sulawesi and find technology adoption to play a crucial role. We show that geography-induced migration together with population size foster through their effect on institutions technology adoption.

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Bibliographic Info

Paper provided by International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague in its series ISS Working Papers - General Series with number 18745.

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Date of creation: 01 Nov 2007
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Handle: RePEc:ems:euriss:18745

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Keywords: Indonesia; agricultural development; geography; land rights; migration; technology adoption;

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Cited by:
  1. McMillan, Margaret & Masters, William A. & Kazianga, Harounan, 2012. "Rural demography, public services, and land rights in Africa: A village-level analysis in Burkina Faso," IFPRI discussion papers 1164, International Food Policy Research Institute (IFPRI).
  2. Stephan Klasen & Jan Priebe & Robert Rudolf, 2010. "Cash Crop Choice and Income Dynamics in Rural Areas: Evidence for Post-Crisis Indonesia," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 33, Courant Research Centre PEG.
  3. Margaret S. McMillan & William A. Masters & Harounan Kazianga, 2013. "Disease Control, Demographic Change and Institutional Development in Africa," NBER Working Papers 19245, National Bureau of Economic Research, Inc.
  4. Margaret S. McMillan & William A. Masters & Harounan Kazianga, 2014. "Demographic Pressure and Institutional Change: Village-Level Response to Rural Population Growth in Burkina Faso," NBER Chapters, in: African Successes: Health and Gender National Bureau of Economic Research, Inc.

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