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Geography vs. Institutions at the Village Level

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  • Grimm, Michael
  • Klasen, Stephan

Abstract

There is well-known debate about the respective role 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 morality as an instrument for endegenous 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 agricultural growth across villages on the Indonesian Island of Sulawesi and find technology adoption to play a crucial role. We show that geography through its effects on migration and institutions is a valid instrument to establish the causal links between institutions and technology adoption as well as technology and agricultural growth. --

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Bibliographic Info

Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Göttingen 2007 with number 9.

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Date of creation: 2007
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Handle: RePEc:zbw:gdec07:6532

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Keywords: Geography; land rights; migration; technology adoption; agricultural developement; Indonesia;

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Cited by:
  1. Margaret S. McMillan & William A. Masters & Harounan Kazianga, 2013. "Disease Control, Demographic Change and Institutional Development in Africa," Economics Working Paper Series 1302, Oklahoma State University, Department of Economics and Legal Studies in Business.
  2. Stephan Klasen & Jan Priebe & Robert Rudolf, 2013. "Cash crop choice and income dynamics in rural areas: evidence for post-crisis Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 44(3), pages 349-364, 05.
  3. Margaret S. McMillan & William A. Masters & Harounan Kazianga, 2011. "Rural Demography, Public Services and Land Rights in Africa: A Village-Level Analysis in Burkina Faso," NBER Working Papers 17718, National Bureau of Economic Research, Inc.
  4. Margaret S. McMillan & William A. Masters & Harounan Kazianga, 2014. "Demographic Pressure and Institutional Change: Village-Level Response to Rural Population Growth in Burkina Faso," NBER Chapters, in: African Successes: Government and Institutions National Bureau of Economic Research, Inc.
  5. repec:nbr:nberch:13373 is not listed on IDEAS

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