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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.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 758.

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Length: 62 pages
Date of creation: 05 Aug 2008
Date of revision:
Handle: RePEc:hhs:iuiwop:0758

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Keywords: Economic Development; Culture; Origins of Political Institutions;

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Cited by:
  1. Paunic, Alida, 2009. "I did it my way," MPRA Paper 17547, University Library of Munich, Germany.
  2. Asoni, Andrea, 2008. "Protection of Property Rights and Growth as Political Equilibria," Working Paper Series 737, Research Institute of Industrial Economics.

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