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American Economic Review Vol. 91 No. 5 2001

The Colonial Origins of Comparative Development: An Empirical Investigation

Daron Acemoglu1; Simon Johnson2; James A. Robinson3

1 Department of Economics, E52-380b, Massachusetts Institute of Technology, Cambridge, MA 02319, and Canadian Institute for Advanced Research. · 2 Sloan School of Management, Massachusetts Institute of Technology, Cambridge, MA 02319. · 3 Department of Political Science and Department of Economics, 210 Barrows Hall, University of California, Berkeley, CA 94720.

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.

DOI
10.1257/aer.91.5.1369
Volume
91
Issue
5
Pages
1369-1401
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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