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The Colonial and Geographic Origins of Comparative Development

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Abstract

While the direct impact of geographic endowments on prosperity is present in all countries, in former colonies, geography has also affected colonization policies and, therefore, institutional outcomes. Using non-colonized countries as a control group, I develop an empirical strategy that disentangles the partial effects of institutions and of endowments on income. I find that institutions are the main determinant of development, but that endowments have a sizeable direct impact, as well. Last, I apply the empirical strategy to examine the theories put forward by La Porta et al. (1999) and by Acemoglu et al. (2001), finding support for both theories, but also evidence that the authors’ estimates are biased since they mix up the effect of the historical determinants of institutions with the sizeable direct impact of access to trade and of disease environment.

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Paper provided by Swiss National Bank, Study Center Gerzensee in its series Working Papers with number 09.03.

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Length: 51 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:szg:worpap:0903

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  1. James Feyrer & Bruce Sacerdote, 2009. "Colonialism and Modern Income: Islands as Natural Experiments," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 245-262, May.
  2. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-63, July.
  3. Simeon Djankov & Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2003. "The New Comparative Economics," NBER Working Papers 9608, National Bureau of Economic Research, Inc.
  4. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, Springer, vol. 9(2), pages 131-165, 06.
  5. Francisco A. Gallego, 2010. "Historical Origins of Schooling: The Role of Democracy and Political Decentralization," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 228-243, May.
  6. Wacziarg, Romain & Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio, 2002. "Fractionalization," Research Papers, Stanford University, Graduate School of Business 1744, Stanford University, Graduate School of Business.
  7. Jeffrey D. Sachs, 2003. "Institutions Don't Rule: Direct Effects of Geography on Per Capita Income," NBER Working Papers 9490, National Bureau of Economic Research, Inc.
  8. Daron Acemoglu & Simon Johnson & James Robinson, 2003. "Disease and Development in Historical Perspective," Journal of the European Economic Association, MIT Press, MIT Press, vol. 1(2-3), pages 397-405, 04/05.
  9. David N. Weil, 2005. "Accounting for the Effect of Health on Economic Growth," Working Papers 2005-07, Brown University, Department of Economics.
  10. Nathan Nunn & Diego Puga, 2007. "Ruggedness: The blessing of bad geography in Africa," Working Papers, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales 2007-09, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales, revised 01 May 2010.
  11. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal Of Fortune: Geography And Institutions In The Making Of The Modern World Income Distribution," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 117(4), pages 1231-1294, November.
  12. 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.
  13. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth : revisiting the evidence," Policy Research Working Paper Series 3004, The World Bank.
  14. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, Wiley Blackwell, vol. 7(3), pages 207-227, November.
  15. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, American Economic Association, vol. 91(5), pages 1369-1401, December.
  16. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," NBER Working Papers 10568, National Bureau of Economic Research, Inc.
  17. Nicola Gennaioli & Ilia Rainer, 2007. "The modern impact of precolonial centralization in Africa," Journal of Economic Growth, Springer, Springer, vol. 12(3), pages 185-234, September.
  18. William Easterly & Ross Levine, 2002. "Tropics, Germs, and Crops: How Endowments Influence Economic Development," Working Papers, Center for Global Development 15, Center for Global Development.
  19. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, American Economic Association, vol. 89(3), pages 379-399, June.
  20. 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.
  21. Albouy, David, 2006. "The Colonial Origins of Comparative Development: An Investigation of the Settler Mortality Data," Center for International and Development Economics Research, Working Paper Series, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkele qt8kt576x8, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
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Cited by:
  1. Elisabeth Benecke, 2011. "Networking for climate change: agency in the context of renewable energy governance in India," International Environmental Agreements: Politics, Law and Economics, Springer, Springer, vol. 11(1), pages 23-42, March.

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