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History matters: New evidence on the long run impact of colonial rule on institutions

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  • Jones, Patricia

Abstract

This paper proposes a new instrument for institutional quality which varies across countries with historically low rates of European settlement. Using a new data set which exploits differences in the quality of colonial administration, it finds evidence that colonies with better paid colonial governors developed better institutions (and became wealthier) than colonies with lesser paid governors. Initially, the best paid governors were sent to colonies which generated the largest revenues but, since the governors’ pay scale remained largely fixed for the next 40years, the same colonies continued to receive the best governors. The data indicate that these early differences in colonial administration—and not initial differences in revenue generating capacity—had a long-run impact on economic development.

Suggested Citation

  • Jones, Patricia, 2013. "History matters: New evidence on the long run impact of colonial rule on institutions," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 181-200.
  • Handle: RePEc:eee:jcecon:v:41:y:2013:i:1:p:181-200
    DOI: 10.1016/j.jce.2012.04.002
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    References listed on IDEAS

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    1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
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    Cited by:

    1. repec:eee:iburev:v:26:y:2017:i:6:p:1184-1195 is not listed on IDEAS
    2. Cristina Terra & Tania El Kallab, 2014. "French Colonial Trade Patterns: European Settlement," THEMA Working Papers 2014-27, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    3. Broms, Rasmus, 2017. "Colonial Revenue Extraction and Modern Day Government Quality in the British Empire," World Development, Elsevier, vol. 90(C), pages 269-280.
    4. Lavallée, Emmanuelle & Lochard, Julie, 2015. "The comparative effects of independence on trade," Journal of Comparative Economics, Elsevier, vol. 43(3), pages 613-632.

    More about this item

    Keywords

    Comparative economics; Institutions; Economic growth;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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