The Colonial Origins of Comparative Development: An Empirical Investigation
Daron AcemoğluDepartment of Economics, E52-380b, Massachusetts Institute of Technology, Cambridge, MA 02319, and Canadian Institute for Advanced ResearchSimon JohnsonSloan School of Management, Massachusetts Institute of Technology, Cambridge, MA 02319James A. RobinsonDepartment of Political Science and Department of Economics, 210 Barrows Hall, University of California, Berkeley, CA 94720
2001en
ABI
Abstract
We exploit differences in European mortality rates to estimate the effect of institutions on economic performance. Europeans adopted very different colonization policies in different colonies, with different associated institutions. In places where Europeans faced high mortality rates, they could not settle and were more likely to set up extractive institutions. These institutions persisted to the present. Exploiting differences in European mortality rates as an instrument for current institutions, we estimate large effects of institutions on income per capita. Once the effect of institutions is controlled for, countries in Africa or those closer to the equator do not have lower incomes. (JEL O11, P16, P51)
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