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The Colonial Origins of Comparative Development: An Empirical Investigation

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  • Daron Acemoglu
  • Simon Johnson
  • James A. Robinson

Abstract

We exploit differences in the mortality rates faced by European colonialists to estimate the effect of institutions on economic performance. Our argument is that Europeans adopted very different colonization policies in different colonies, with different associated institutions. The choice of colonization strategy was, at least in part, determined by whether Europeans could settle in the colony. In places where Europeans faced high mortality rates, they could not settle and they were more likely to set up worse (extractive) institutions. These early institutions persisted to the present. We document evidence supporting these hypotheses. Exploiting differences in mortality rates faced by soldiers, bishops and sailors in the colonies in the 17th, 18th and 19th centuries as an instrument for current institutions, we estimate large effects of institutions on income per capita. Our estimates imply that differences in institutions explain approximately three-quarters of the income per capita differences across former colonies. Once we control for the effect of institutions, we find that countries in Africa or those farther away from the equator do not have lower incomes.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7771.

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Date of creation: Jun 2000
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Publication status: published as Acemoglu, Daron, Simon Johnson and James A. Robinson. "The Colonial Origins Of Comparative Development: An Empirical Investigation," American Economic Review, 2001, v91(5,Dec), 1369-1401.
Handle: RePEc:nbr:nberwo:7771

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  1. Bertocchi, Graziella & Canova, Fabio, 1996. "Did Colonization Matter for Growth? An Empirical Exploration into the Historical Causes of Africa's Underdevelopment," CEPR Discussion Papers 1444, C.E.P.R. Discussion Papers.
  2. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
  3. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  4. Acemoglu, D. & Verdier, T., 1996. "Property Rights, Corruption and the Allocation of Talent: A General Equilibrium Approach," DELTA Working Papers 96-12, DELTA (Ecole normale supérieure).
  5. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  6. Daron Acemoglu, 1993. "Reward Structures and the Allocation of Talent," CEP Discussion Papers dp0143, Centre for Economic Performance, LSE.
  7. Grier, Robin M, 1999. " Colonial Legacies and Economic Growth," Public Choice, Springer, vol. 98(3-4), pages 317-35, March.
  8. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
  9. Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, vol. 40(6), pages 1203-1228, June.
  10. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
  11. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-37, October.
  12. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc.
  13. Frieden, Jeffry A., 1994. "International investment and colonial control: a new interpretation," International Organization, Cambridge University Press, vol. 48(04), pages 559-593, September.
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  1. > Schools of Economic Thought, Epistemology of Economics > Heterodox Approaches > Institutional Economics
  2. > Economic History
  3. > Environmental and Natural Resource Economics > Climate economics > Climate and development
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