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The Colonial and Geographic Origins of Comparative Development

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. Alesina, Alberto, et al, 2003. " Fractionalization," Journal of Economic Growth, Springer, vol. 8(2), pages 155-94, June.
  2. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
  3. 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, vol. 117(4), pages 1231-1294, November.
  4. Nicola Gennaioli & Ilia Rainer, 2007. "The modern impact of precolonial centralization in Africa," Journal of Economic Growth, Springer, vol. 12(3), pages 185-234, September.
  5. David Weil, 2006. "Accounting for the Effect of Health on Economic Growth," DEGIT Conference Papers c011_031, DEGIT, Dynamics, Economic Growth, and International Trade.
  6. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
  7. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth : revisiting the evidence," Policy Research Working Paper Series 3004, The World Bank.
  8. 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.
  9. Djankov, Simeon & Glaeser, Edward L & López-de-Silanes, Florencio & Shleifer, Andrei, 2003. "The New Comparative Economics," CEPR Discussion Papers 3882, C.E.P.R. Discussion Papers.
  10. Daron Acemoglu & Simon Johnson & James Robinson, 2003. "Disease and Development in Historical Perspective," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 397-405, 04/05.
  11. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  12. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, 09.
  13. 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.
  14. Nathan Nunn & Diego Puga, 2007. "Ruggedness: The blessing of bad geography in Africa," Working Papers 2007-09, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales, revised 01 May 2010.
  15. 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 qt8kt576x8, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
  16. William Easterly & Ross Levine, 2002. "Tropics, Germs, and Crops: How Endowments Influence Economic Development," NBER Working Papers 9106, National Bureau of Economic Research, Inc.
  17. James Feyrer & Bruce Sacerdote, 2006. "Colonialism and Modern Income -- Islands as Natural Experiments," NBER Working Papers 12546, National Bureau of Economic Research, Inc.
  18. 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.
  19. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  20. 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, vol. 9(2), pages 131-165, 06.
  21. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
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