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The reversal of fortune thesis reconsidered

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  • Bandyopadhyay, Sanghamitra
  • Green, Elliott D.

Abstract

Acemoglu, Johnson, & Robinson (2002) have claimed that the world income distribution underwent a "Reversal of Fortune" from 1500 to the present, whereby formerly rich countries in what is now the developing world became poor while poor ones grew rich. We question their analysis with regard to both of their proxies for pre-modern income, namely urbanization and population density. First, an alternative measure of urbanization with more observations generates a positive (but not significant) correlation between pre-modern and contemporary income. Second, we show that their measure of population density as a proxy is highly flawed inasmuch as it does not properly measure density on arable land, and when corrected with better data the relationship is no longer robust. At best our results demonstrate a Reversal of Fortune only for the four neo-Europes of Australia, Canada, New Zealand and the United States; at worst, we show no Reversal for other former colonies.

Suggested Citation

  • Bandyopadhyay, Sanghamitra & Green, Elliott D., 2010. "The reversal of fortune thesis reconsidered," LSE Research Online Documents on Economics 41260, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:41260
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    File URL: http://eprints.lse.ac.uk/41260/
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    Cited by:

    1. Meisel, Adolfo, 2014. "No Reversal Of Fortune In The Long Run: Geography And Spatial Persistence Of Prosperity In Colombia, 1500-2005," Revista de Historia Económica, Cambridge University Press, vol. 32(03), pages 411-428, December.
    2. Daron Acemoglu & Giuseppe De Feo & Giacomo De Luca, 2017. "Weak States: Causes and Consequences of the Sicilian Mafia," NBER Working Papers 24115, National Bureau of Economic Research, Inc.
    3. Sanghamitra Bandyopadhyay & Elliott Green, 2016. "Precolonial Political Centralization and Contemporary Development in Uganda," Economic Development and Cultural Change, University of Chicago Press, vol. 64(3), pages 471-508.
    4. Elise Huillery, 2009. "History Matters: The Long-Term Impact of Colonial Public Investments in French West Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 176-215, April.

    More about this item

    Keywords

    income distribution; population density; Reversal of Fortune; urbanization;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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