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Colonial Heritage and Economic Development

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  • Asoni, Andrea

    (Research Institute of Industrial Economics (IFN))

Abstract

While the importance of institutions for explaining cross-country income differences is widely recognized, comparatively little is known about the origins of economic institutions. One strand of the literature emphasizes cultural differences while another points at exogenous environmental factors such as mortality and climate. Both are supported by some empirical evidence. I reconcile the two schools of institutional origins by proposing a theory of self-selection of colonists to different geographic destinations. Exogenous characteristics such as climate, mortality and factor differences determine which type of settler decides to move to a particular colony. Settler type, in turn, shapes the institutional quality of the new country. The model is used to confirm observed regularities reported by previous researchers. Furthermore, robust new evidence is presented in support of this selection process. The results suggest that any theory of colonial development that does not take selection into account will be incomplete.

Suggested Citation

  • Asoni, Andrea, 2008. "Colonial Heritage and Economic Development," Working Paper Series 758, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0758
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    1. Andrea Asoni, 2008. "Protection Of Property Rights And Growth As Political Equilibria," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 953-987, December.
    2. Asoni, Andrea, 2008. "Protection of Property Rights and Growth as Political Equilibria," Working Paper Series 737, Research Institute of Industrial Economics.
    3. Paunic, Alida, 2009. "I did it my way," MPRA Paper 17547, University Library of Munich, Germany.

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    More about this item

    Keywords

    Economic Development; Culture; Origins of Political Institutions;
    All these keywords.

    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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