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    Colonial Origins of Comparative Development

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    Renato Vidaurre
    The document summarizes research on the colonial origins of differences in economic development across countries. It hypothesizes that the mortality rates European colonizers faced determined whether colonies developed extractive or inclusive institutions. High colonizer mortality led to extractive institutions with weak property rights in colonies, while low mortality allowed inclusive institutions with strong property rights like in settler colonies. Analysis found colonizer mortality explains about 20% of variation in modern institutions and economic performance, more than other factors like geography or religion. While institutions can change, they often persist from their origins.

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    Colonial Origins of Comparative Development

    Uploaded by

    Renato Vidaurre
    42 views8 pages
    The document summarizes research on the colonial origins of differences in economic development across countries. It hypothesizes that the mortality rates European colonizers faced determined whether colonies developed extractive or inclusive institutions. High colonizer mortality led to extractive institutions with weak property rights in colonies, while low mortality allowed inclusive institutions with strong property rights like in settler colonies. Analysis found colonizer mortality explains about 20% of variation in modern institutions and economic performance, more than other factors like geography or religion. While institutions can change, they often persist from their origins.

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    Colonial origins of comparative development

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    The document summarizes research on the colonial origins of differences in economic development across countries. It hypothesizes that the mortality rates European colonizers faced determined whether colonies developed extractive or inclusive institutions. High colonizer mortality led to extractive institutions with weak property rights in colonies, while low mortality allowed inclusive institutions with strong property rights like in settler colonies. Analysis found colonizer mortality explains about 20% of variation in modern institutions and economic performance, more than other factors like geography or religion. While institutions can change, they often persist from their origins.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    42 views8 pages

    Colonial Origins of Comparative Development

    Uploaded by

    Renato Vidaurre
    The document summarizes research on the colonial origins of differences in economic development across countries. It hypothesizes that the mortality rates European colonizers faced determined whether colonies developed extractive or inclusive institutions. High colonizer mortality led to extractive institutions with weak property rights in colonies, while low mortality allowed inclusive institutions with strong property rights like in settler colonies. Analysis found colonizer mortality explains about 20% of variation in modern institutions and economic performance, more than other factors like geography or religion. While institutions can change, they often persist from their origins.

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    © All Rights Reserved
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    of 8

    12/2/18

    The colonial origins of


    comparative
    development
    (Acemoglu, Johnson and Robinson, 2001)

    Luis E. García Westphalen, Ph.D.


    Ph.D. in International Development

    Research Question:

    ¡What are the fundamental causes


    of the differences between per
    capita income across countries?

    1
    12/2/18

    Literature Review: causes of


    economic differences
    1. Percentage of European
    descendent population.
    2. Ethnic Fragmentation.
    3. Religion.
    4. Geography, climate, natural
    resources, soil quality (distance to
    the equator),

    Literature Review (Cont.)


    5. Diseases (malaria, infant mortality,
    life expectancy/span).
    6. Colonizer (legal tradition).
    7. Institutions have the biggest impact
    in economic growth and, thus, in
    economic differences.

    2
    12/2/18

    Literature Review:
    Institutions
    ¡ Strong correlation between institutions
    and economic development
    (Property rights, Expropriation Risk Index).

    ¡ 50% of variation in per capita income is


    consequence of different protection of
    property rights.
    ¡ Is there a causal relationship? Is there
    any biases?

    Lit. Rev: Institutions and


    Economic performance

    3
    12/2/18

    Hypothesis: What determines


    different quality of institutions?
    ¡ Different colonizer strategy:
    ØExtractive states vs. Neo-European states
    (Representative institutions, Rule of Law,
    Property rights).

    ¡ Decisive factor:
    ØEuropean (colonizers) mortality.

    ¡ Importance of colonizer strategy:


    ØInstitutional persistence.

    Hypothesis: What determines the


    differences in institutional quality?

    (Potential) Settler
    Settlement
    Mortality

    early institutions current Institutions

    current
    performance

    4
    12/2/18

    Methodology:
    ¡ Level of settlement in colonies?
    ØMortality of colonizer soldiers (Curtin, 1989,
    “Death by Migration) (s. XVII – XIX).
    ØMortality of catholic priests during
    colonization (s. XVII – XIX) (Records of the
    Vatican).

    ¡ Quality of institutions?
    ØExpropriation Risk Index (Political Risk
    Services).

    Findings
    ¡ Strong correlation between the colonizer
    mortality index (CMI) and current
    institutional quality index (Expropriation
    Risk Index).
    ¡ CMI explains about 20% of variation in
    the Expropriation Risk Index (IRE)
    ¡ Strong correlation between the CMI and
    current levels of development.

    5
    12/2/18

    10

    Findings: CMI & Economic


    performance

    11

    Findings: econometric
    controls
    ¡ Geography (temperature, weather):
    ØDo not have a significate impact on
    economic development.

    ¡ Religion:
    ØDo not have a significate impact on
    economic development.

    ¡ Natural resources (soil quality):


    ØDo not have a significate impact on
    economic development.

    6
    12/2/18

    12

    Findings: econometric
    controls
    ¡ Life expectancy, infant mortality, and
    malaria:
    ØDo not have a significate impact on
    economic development.
    ¡ European population:
    ØDo not have a significate impact on
    economic development.
    ¡ British colonies:
    ØDoes have an impact on economic
    development (but it is much less than the
    colonizer strategy).

    13

    Final remarks
    ¡ An institutional change can contribute
    significantly to economic development.
    ¡ An institutional change is possible. For
    example:
    ¡ Japan (Meiji Restoration)
    ¡ South Korea (1960’s)

    ¡ Institutional features (such as expropriation risk,


    property rights enforcement, or rule of law)
    could probably reflect an equilibrium outcome
    related to some more fundamental
    “institutions” (e.g., presidential vs.
    parliamentary system).

    7
    12/2/18

    14

    ¡ End of presentation.

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