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Geography vs. institutions at the village level

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Author Info
M. Grimm
S. Klasen

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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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Paper provided by Institute of Social Studies in its series Working Papers - General Series with number 449.

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Length: 26 p.
Date of creation: 2007
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Handle: RePEc:iss:wpaper:449

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

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Find related papers by JEL classification:
K11 - Law and Economics - - Basic Areas of Law - - - Property Law
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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    Other versions:
  6. Miet Maertens & Manfred Zeller & Regina Birner, 2006. "Sustainable agricultural intensification in forest frontier areas," Agricultural Economics, International Association of Agricultural Economists, vol. 34(2), pages 197-206, 03. [Downloadable!] (restricted)
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  10. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," World Bank Economic Review, Oxford University Press, vol. 10(1), pages 1-25, January.
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  14. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1995. "Power, distortions, revolt and reform in agricultural land relations," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 42, pages 2659-2772 Elsevier. [Downloadable!] (restricted)
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  15. Stephan Klasen & Thorsten Nestmann, 2006. "Population, population density and technological change," Journal of Population Economics, Springer, vol. 19(3), pages 611-626, July. [Downloadable!] (restricted)
    Other versions:
  16. Ravallion, Martin & Datt, Gaurav, 2002. "Why has economic growth been more pro-poor in some states of India than others?," Journal of Development Economics, Elsevier, vol. 68(2), pages 381-400, August. [Downloadable!] (restricted)
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