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The European origins of economic development

Author

Listed:
  • William Easterly

    (New York University
    The NBER)

  • Ross Levine

    (The NBER
    University of California, Berkeley)

Abstract

Although a large literature argues that European settlement outside of Europe during colonization had an enduring effect on economic development, researchers have been unable to assess these predictions directly because of an absence of data on colonial European settlement. We construct a new database on the European share of the population during colonization and examine its association with economic development today. We find a strong, positive relation between current income per capita and colonial European settlement that is robust to controlling for the current proportion of the population of European descent, as well as many other country characteristics. The results suggest that any adverse effects of extractive institutions associated with small European settlements were, even at low levels of colonial European settlement, more than offset by other things that Europeans brought, such as human capital and technology.

Suggested Citation

  • William Easterly & Ross Levine, 2016. "The European origins of economic development," Journal of Economic Growth, Springer, vol. 21(3), pages 225-257, September.
  • Handle: RePEc:kap:jecgro:v:21:y:2016:i:3:d:10.1007_s10887-016-9130-y
    DOI: 10.1007/s10887-016-9130-y
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    More about this item

    Keywords

    Institutions; Human capital; Political economy; Natural resources;
    All these keywords.

    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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