American Economic Association

The Colonial Origins of Comparative Development: An Empirical Investigation

Author(s): Daron Acemoglu, Simon Johnson, James A. Robinson

Source: The American Economic Review, Vol. 91, No. 5 (Dec., 2001), pp. 1369-1401

Published by: American Economic Association

Stable URL: http://www.jstor.org/stable/2677930

Accessed: 21/05/2009 16:59

Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at

http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless

you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you

may use content in the JSTOR archive only for your personal, non-commercial use.

Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at

http://www.jstor.org/action/showPublisher?publisherCode=aea.

Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed

page of such transmission.

JSTOR is a not-for-profit organization founded in 1995 to build trusted digital archives for scholarship. We work with the

scholarly community to preserve their work and the materials they rely upon, and to build a common research platform that

promotes the discovery and use of these resources. For more information about JSTOR, please contact [email protected].

American Economic Association is collaborating with JSTOR to digitize, preserve and extend access to The

American Economic Review.

http://www.jstor.org

The Colonial Origins of Comparative Development:

An EmpiricalI nvestigation

By DARON ACEMOGLU,S IMON JOHNSON,A ND JAMESA . ROBINSON*

We exploit differences in European mortalityr ates to estimate the effect of institu-

tions on economic performance. Europeans adopted very different colonization

policies in differentc olonies, with differenta ssociated institutions.I n places where

Europeansf aced high mortalityr ates, they could not settle and were more likely to

set up extractive institutions.T hese institutionsp ersisted to the present. Exploiting

differencesi n Europeanm ortalityr ates as an instrumenfto r currenti nstitutions,w e

estimate large effects of institutions on income per capita. Once the effect of

institutionsi s controlledfor, countries in Africa or those closer to the equatord o not

have lower incomes. (JEL 011, P16, P51)

What are the fundamental causes of the tionary policies will invest more in physical

large differences in income per capita across and human capital, and will use these factors

countries? Although there is still little con- more efficiently to achieve a greater level of

sensus on the answer to this question, differ- income (e.g., Douglass C. North and Robert

ences in institutions and property rights have P. Thomas, 1973; Eric L. Jones, 1981; North,

received considerable attention in recent 1981). This view receives some support from

years. Countries with better "institutions," cross-country correlations between measures

more secure property rights, and less distor- of property rights and economic development

(e.g., Stephen Knack and Philip Keefer, 1995;

Paulo Mauro, 1995; Robert E. Hall and

* Acemoglu: Department of Economics, E52-380b, Charles I. Jones, 1999; Dani Rodrik, 1999),

Massachusetts Institute of Technology, Cambridge, MA and from a few micro studies that investigate

02319, and Canadian Institute for Advanced Research the relationship between property rights and

(e-mail: [email protected]);J ohnson: Sloan School of Man-

investment or output (e.g., Timothy Besley,

agement, Massachusetts Institute of Technology, Cam-

bridge, MA 02319 (e-mail: [email protected]);R obinson: 1995; ChristopherM azingo, 1999; Johnson et

Department of Political Science and Department of Eco- al., 1999).

nomics, 210 BarrowsH all, University of California,B erke- At some level it is obvious that institutions

ley, CA 94720 (e-mail: [email protected]).

matter. Witness, for example, the divergent

We thank Joshua Angrist, Abhijit Banerjee, Esther Duflo,

paths of North and South Korea, or East and

Stan Engerman, John Gallup, Claudia Goldin, Robert

Hall, Chad Jones, Larry Katz, Richard Locke, Andrei West Germany, where one part of the country

Shleifer, Ken Sokoloff, Judith Tendler, three anonymous stagnated under central planning and collec-

referees, and seminar participants at the University of tive ownership, while the other prospered

California-Berkeley, Brown University, Canadian Insti-

with private property and a market economy.

tute for Advanced Research, Columbia University, Har-

vard University, Massachusetts Institute of Technology, Nevertheless, we lack reliable estimates of

National Bureau of Economic Research, Northwestern the effect of institutions on economic perfor-

University, New York University, Princeton University, mance. It is quite likely that rich economies

University of Rochester, Stanford University, Toulouse

choose or can afford better institutions. Per-

University, University of California-Los Angeles, and the

haps more important, economies that are dif-

World Bank for useful comments. We also thank Robert

McCaa for guiding us to the data on bishops' mortality. ferent for a variety of reasons will differ both

1369

1370 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

in their institutions and in their income per current institutions in these countries.2 More

capita. specifically, our theory can be schematically

To estimate the impact of institutionso n eco- summarizeda s

nomic performance,w e need a source of exog-

enous variationi n institutions.I n this paper,w e

(potential) settler > settlements

propose a theory of institutional differences

mortality

among countries colonized by Europeans,' and

exploit this theory to derive a possible source of

early current

exogenous variation. Our theory rests on three

institutions institutions

premises:

current

1. There were different types of colonization

policies which createdd ifferent sets of insti- performance.

tutions.A t one extreme,E uropeanp owers set

up "extractives tates,"e xemplifiedb y the Bel- We use data on the mortalityr ates of soldiers,

gian colonizationo f the Congo. These institu- bishops, and sailors stationedi n the colonies be-

tions did not introducem uch protectionf or tween the seventeentha nd nineteenthc enturies,

privatep roperty,n or did they provide checks largely based on the work of the historianP hilip

and balances against governmente xpropria- D. Curtin.T hese give a good indicationo f the

tion. In fact, the mainp urposeo f the extractive mortalityr ates faced by settlers.E uropeansw ere

state was to transfera s much of the resources well informeda bout these mortalityr ates at the

of the colony to the colonizer. time, even though they did not know how to

At the other extreme, many Europeansm i- control the diseases that caused these high mor-

grated and settled in a number of colonies, tality rates.

creating what the historian Alfred Crosby Figure 1 plots the logarithm of GDP per

(1986) calls "Neo-Europes."T he settlerst ried capita today against the logarithmo f the settler

to replicateE uropeani nstitutions,w ith strong mortalityr ates per thousandf or a sample of 75

emphasis on private property and checks countries( see below for data details). It shows a

againstg overnmentp ower. Primarye xamples strong negative relationship. Colonies where

of this include Australia,N ew Zealand,C an- Europeans faced higher mortality rates are to-

ada, and the UnitedS tates. day substantiallyp oorer than colonies that were

2. The colonization strategy was influenced by healthy for Europeans. Our theory is that this

the feasibility of settlements.I n places where relationshipr eflects the effect of settler mortal-

the disease environmentw as not favorablet o ity working throught he institutionsb roughtb y

Europeans ettlement,t he cards were stacked Europeans.T o substantiatet his, we regress cur-

against the creationo f Neo-Europes,a nd the rent performance on current institutions, and

formation of the extractive state was more instrumentt he latter by settler mortality rates.

likely. Since our focus is on propertyr ights and checks

3. The colonial state and institutions persisted against government power, we use the protec-

even after independence. tion against "risk of expropriation"i ndex from

Political Risk Services as a proxy for institu-

Based on these three premises, we use the tions. This variable measures differences in in-

mortality rates expected by the first European stitutions originating from different types of

settlers in the colonies as an instrument for states and state policies.3 There is a strong

1 By "colonial experience" we do not only mean the 2 Note that althougho nly some countriesw ere colonized,

direct control of the colonies by Europeanp owers, but more there is no selection bias here. This is because the question

generally, Europeani nfluence on the rest of the world. So we are interested in is the effect of colonization policy

according to this definition, Sub-Saharan Africa was conditional on being colonized.

strongly affected by "colonialism" between the sixteenth 3Government expropriationi s not the only institutional

and nineteenthc enturiesb ecause of the Atlantic slave trade. feature that matters. Our view is that there is a "cluster of

VOL.9 1 NO. 5 ACEMOGLUE T AL.: THE COLONIALO RIGINSO F DEVELOPMENT 1371

10 'Ivp

LO) < PANGA

tl FJ GUY AGO

Xi PAKIND SDN GMB

0cao BGD NERMD NGA

TA

tl 6 ETH SI

n- 6

0

2 4 6 8

Logo f SettlerM ortality

FIGURE 1. REDUCED-FORM RELATIONSHIP BETWEEN INCOME AND SETTLER MORTALITY

(first-stage)r elationshipb etween settler mortal- institutions to the level of Chile could, in the

ity rates and currenti nstitutions,w hich is inter- long run, lead to as much as a 7-fold increase in

esting in its own right. The regression shows Nigeria's income (in practice Chile is over 11

that mortality rates faced by the settlers more times as rich as Nigeria).

than 100 years ago explains over 25 percent The exclusion restrictioni mplied by our in-

of the variationi n currenti nstitutions.4W e also strumental variable regression is that, condi-

document that this relationship works through tional on the controls included in the regression,

the channels we hypothesize: (potential) settler the mortality rates of European settlers more

mortality rates were a major determinant of than 100 years ago have no effect on GDP per

settlements; settlements were a major determi- capita today, other than their effect through

nant of early institutions (in practice, institu- institutional development. The major concern

tions in 1900); and there is a strong correlation with this exclusion restriction is that the mor-

between early institutions and institutions to- tality rates of settlers could be correlatedw ith

day. Our two-stage least-squarese stimate of the the current disease environment, which may

effect of institutions on performance is rela- have a direct effect on economic performance.

tively precisely estimated and large. For ex- In this case, our instrumental-variablese sti-

ample, it implies that improving Nigeria's mates may be assigning the effect of diseases on

income to institutions. We believe that this is

unlikely to be the case and that our exclusion

restriction is plausible. The great majority of

institutions,"i ncluding constraintso n governmente xpropri- Europeand eaths in the colonies were caused by

ation, independentj udiciary, property rights enforcement, malaria and yellow fever. Although these dis-

and institutions providing equal access to education and

eases were fatal to Europeansw ho had no im-

ensuring civil liberties, that are important to encourage

investment and growth. Expropriationr isk is related to all munity, they had limited effect on indigenous

these institutionalf eatures. In Acemoglu et al. (2000), we adults who had developed various types of im-

reporteds imilar results with other institutions variables. munities. These diseases are therefore unlikely

4 Differences in mortalityr ates are not the only, or even to be the reason why many countries in Africa

the main, cause of variationi n institutions.F or our empir-

and Asia are very poor today (see the discussion

ical approacht o work, all we need is that they are a source

of exogenous variation. in Section III, subsection A). This notion is

1372 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

supportedb y the mortalityr ates of local people mortality)a nd the currentf raction of the popu-

in these areas. For example, Curtin( 1968 Table lation of Europeand escent.

2) reportst hat the annualm ortalityr ates of local Naturally, it is impossible to control for all

troops serving with the British army in Bengal possible variablest hat might be correlatedw ith

and Madras were respectively 11 and 13 in settler mortality and economic outcomes. Fur-

1,000. These numbers are quite comparablet o, thermore,o ur empiricala pproachm ight capture

in fact lower than, the annual mortalityr ates of the effect of settler mortality on economic per-

British troops serving in Britain, which were formance, but working through other channels.

approximately1 5 in 1,000. In contrast,t he mor- We deal with these problems by using a simple

tality rates of British troops serving in these overidentificationt est using measures of Euro-

colonies were much higher because of their lack pean migration to the colonies and early insti-

of immunity. For example, mortality rates in tutions as additional instruments.W e then use

Bengal and Madras for British troops were be- overidentificationt ests to detect whether settler

tween 70 and 170 in 1,000. The view that the mortality has a direct effect on currentp erfor-

disease burden for indigenous adults was not mance. The results are encouraging for our

unusual in places like Africa or India is also approach;t hey generaten o evidence for a direct

supportedb y the relativelyh igh populationd en- effect of settler mortality on economic

sities in these places before Europeans arrived outcomes.

(Colin McEvedy and Richard Jones, 1975). We are not aware of others who have pointed

We documentt hat our estimates of the effect out the link between settler mortalitya nd insti-

of institutionso n performancea re not driven by tutions, though scholars such as William H.

outliers.F or example, excluding Australia,N ew McNeill (1976), Crosby (1986), and Jared M.

Zealand,C anada,a nd the United States does not Diamond (1997) have discussed the influence of

change the results, nor does excluding Africa. diseases on human history. Diamond (1997), in

Interestingly, we show that once the effect of particular, emphasizes comparative develop-

institutions on economic performance is con- ment, but his theory is based on the geograph-

trolled for, neitherd istance from the equatorn or ical determinants of the incidence of the

the dummy for Africa is significant. These re- neolithic revolution.H e ignores both the impor-

sults suggest that Africa is poorer than the rest tance of institutionsa nd the potential causes of

of the world not because of pure geographic divergence in more recent development, which

or cultural factors, but because of worse are the main focus of our paper. Work by Ro-

institutions. nald E. Robinson and John Gallagher (1961),

The validity of our approach-i.e., our exclu- Lewis H. Gann and Peter Duignan (1962),

sion restriction-is threatenedi f other factors Donald Denoon (1983), and Philip J. Cain and

correlatedw ith the estimates of settler mortality Anthony G. Hopkins (1993) emphasizes that

affect income per capita. We adopt two strate- settler colonies such as the United States and

gies to substantiate that our results are not New Zealand are different from other colonies,

driven by omitted factors. First, we investigate and point out that these differences were impor-

whether institutions have a comparable effect tant for their economic success. Nevertheless,

on income once we control for a number of this literatured oes not develop the link between

variablesp otentiallyc orrelatedw ith settlerm or- mortality, settlements, and institutions.

tality and economic outcomes. We find that Our argumenti s most closely related to work

none of these overturno ur results; the estimates on the influence of colonial experience on insti-

change remarkablyl ittle when we include con- tutions. FrederichA . von Hayek (1960) argued

trols for the identity of the main colonizer, legal that the British common law tradition was su-

origin, climate, religion, geography, naturalr e- periort o the Frenchc ivil law, which was devel-

sources, soil quality, and measures of ethnolin- oped during the Napoleonic era to restrain

guistic fragmentation.F urthermore,t he results judges' interferencew ith state policies (see also

are also robust to the inclusion of controls for Seymour M. Lipset, 1994). More recently,

the currentd isease environment( e.g., the prev- Rafael La Porta et al. (1998, 1999) emphasize

alence of malaria, life expectancy, and infant the importanceo f colonial origin (the identity of

VOL 91 NO. 5 ACEMOGLUE T AL: THE COLONIALO RIGINSO F DEVELOPMENT 1373

the colonizer) and legal origin on currenti nsti- direct effect on performance.F or example, Wil-

tutions, and show that the common-law coun- liiam Easterly and Ross Levine (1997) argue

tries and former British colonies have better that ethnolinguistic fragmentation can affect

property rights and more developed financial performance by creating political instability,

markets. Similarly, David Landes (1998 Chap- while Charles de Montesquieu [1748] (1989)

ters 19 and 20) and North et al. (1998) argue and more recently David E. Bloom and Jeffrey

that former British colonies prosperedr elative D. Sachs (1998) and John Gallup et al. (1998)

to former French, Spanish, and Portuguesec ol- argue for a direct effect of climate on perfor-

onies because of the good economic and polit- mance. If, indeed, these variables have a direct

ical institutionsa nd culture they inheritedf rom effect, they are invalid instrumentsa nd do not

Britain. In contrast to this approach which establish that it is institutions that matter. The

focuses on the identity of the colonizer, we advantageo f our approachi s that conditionalo n

emphasize the conditions in the colonies. Spe- the variablesw e alreadyc ontrolf or, settlerm or-

cifically, in our theory-and in the data-it is tality more than 100 years ago should have no

not the identity of the colonizer or legal origin effect on output today, other than through its

that matters,b ut whether Europeanc olonialists effect on institutions. Interestingly, our results

could safely settle in a particular location: show that distance from the equator does not

where they could not settle, they created worse have an independente ffect on economic perfor-

institutions. In this respect, our argument is mance, validating the use of this variable as an

closely related to that of Stanley L. Engerman instrument in the work by Hall and Jones

and Kenneth L. Sokoloff (1997) who also em- (1999).

phasize institutions,b ut link them to factor en- The next section outlines our hypothesis and

dowments and inequality. provides supportingh istoricale vidence. Section

Empirically,o ur work is related to a number II presents OLS regressions of GDP per capita

of other attempts to uncover the link between on our index of institutions. Section III de-

institutions and development, as well as to scribes our key instrumentf or institutions, the

Graziella Bertocchi and Fabio Canova (1996) mortalityr ates faced by potential settlers at the

and Robin M. Grier (1999), who investigate the time of colonization. Section IV presents our

effect of being a colony on postwar growth. main results. Section V investigates the robust-

Two papers deal with the endogeneity of in- ness of our results, and Section VI concludes.

stitutions by using an instrumental variables

approacha s we do here. Mauro (1995) instru- I. The Hypothesis and Historical Background

ments for corruptionu sing ethnolinguisticf rag-

mentation. Hall and Jones (1999), in turn, use We hypothesize that settlerm ortalitya ffected

distance from the equator as an instrumentf or settlements; settlements affected early institu-

social infrastructureb ecause, they argue, lati- tions; and early institutions persisted and

tude is correlated with "Western influence," formed the basis of currenti nstitutions. In this

which leads to good institutions.T he theoretical section, we discuss and substantiatet his hypoth-

reasoning for these instrumentsi s not entirely esis. The next subsection discusses the link be-

convincing. It is not easy to argue that the tween mortalityr ates of settlers and settlement

Belgian influence in the Congo, or Western decisions, then we discuss differences in colo-

influence in the Gold Coast during the era of nization policies, and finally, we turn to the

slavery promoted good institutions. Ethnolin- causes of institutionalp ersistence.

guistic fragmentation,o n the other hand, seems

endogenous, especially since such fragmenta- A. Mortality and Settlements

tion almost completely disappearedi n Europe

during the era of growth when a centralized There is little doubt that mortalityr ates were

state and market emerged (see, e.g., Eugen a key determinant of European settlements.

J. Weber, 1976; Benedict Anderson, 1983). Curtin (1964, 1998) documents how both the

Econometrically,t he problem with both studies British and French press informed the public of

is that their instruments can plausibly have a mortality rates in the colonies. Curtin (1964)

1374 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

also documents how early British expectations including Robinson and Gallagher( 1961), Gann

for settlement in West Africa were dashed by and Duignan (1962), Denoon (1983), and Cain

very high mortality among early settlers, about and Hopkins (1993), have documented the de-

half of whom could be expected to die in the velopment of "settlerc olonies," where Europe-

first year. In the "Provinceo f Freedom"( Sierra ans settled in large numbers, and life was

Leone), Europeanm ortalityi n the first year was modeled aftert he home country.D enoon (1983)

46 percent, in Bulama (April 1792-April 1793) emphasizes that settler colonies had representa-

there was 61-percent mortality among Europe- tive institutions which promoted what the set-

ans. In the first year of the Sierra Leone Com- tlers wanted and that what they wanted was

pany (1792-1793), 72 percent of the European freedom and the ability to get rich by engaging

settlers died. On Mungo Park's Second Expedi- in trade. He argues that "there was undeniably

tion (May-November 1805), 87 percent of Eu- something capitalist in the structure of these

ropeans died during the overland trip from colonies. Private ownership of land and live-

Gambiat o the Niger, and all the Europeansd ied stock was well established very early ..." (p.

before completing the expedition. 35).

An interesting example of the awareness of When the establishmento f European-likei n-

the disease environment comes from the Pil- stitutions did not arise naturally, the settlers

grim fathers. They decided to migrate to the were ready to fight for them against the wishes

United States rathert han Guyanab ecause of the of the home country. Australiai s an interesting

high mortality rates in Guyana (see Crosby, example here. Most of the early settlers in Aus-

1986 pp. 143-44). Another example comes traliaw ere ex-convicts, but the land was owned

from the BeauchampC ommitteei n 1795, set up largely by ex-jailors, and there was no legal

to decide where to send British convicts who protection against the arbitraryp ower of land-

had previously been sent to the United States. owners. The settlers wanted institutionsa nd po-

One of the leading proposals was the island of litical rights like those prevailing in England at

Lemane, up the Gambia River. The committee the time. They demandedj ury trials, freedom

rejected this possibility because they decided from arbitrarya rrest, and electoral representa-

mortality rates would be too high even for the tion. Although the British governmentr esisted

convicts. SouthwestA frica was also rejectedf or at first, the settlers arguedt hat they were British

health reasons. The final decision was to send and deserved the same rights as in the home

convicts to Australia. country (see Robert Hughes, 1987). Cain and

The eventual expansion of many of the col- Hopkins write (1993 p. 237) "from the late

onies was also related to the living conditions 1840s the British bowed to local pressuresa nd,

there. In places where the early settlers faced in line with observed constitutional changes

high mortalityr ates, there would be less incen- takingp lace in Britainh erself, acceptedt he idea

tive for new settlers to come.5 that, in mature colonies, governors should in

future form ministries from the majority ele-

B. Types of Colonization and Settlements ments in elected legislatures." They also sug-

gest that "the enormous boom in public

The historical evidence supportsb oth the no- investment after 1870 [in New Zealand] ... was

tion that there was a wide range of different an attempt to build up an infrastructure.. . to

types of colonization and that the presence or maintain high living standards in a country

absence of European settlers was a key deter- where voters expected politicians actively to

minanto f the form colonialism took. Historians, promote their economic welfare." (p. 225).6

5 Naturally,o ther factors also influenceds ettlements.F or 6 RobertH . Bates (1983 Chapter3 ) gives a nice example

example, despite the relatively high mortality rates, many of the influence of settlers on policy in Africa. The British

Europeans migrated to the Caribbeanb ecause of the very colonial governmentp ursued many policies that depressed

high incomes there at the time (see, e.g., Richard S. Dunn, the price of cocoa, the main produce of the farmers in

1972; David W. Galenson, 1996; Engerman and Sokoloff, Ghana. In contrast, the British government supported the

1997; David Eltis, 2000). prices faced by the commercial cereal farmers in Kenya.

VOL.9 1 NO. 5 ACEMOGLUE T AL.: THE COLONIALO RIGINSO F DEVELOPMENT 1375

This is in sharpc ontrastt o the colonial expe- tuned to the interests of business and willing to

rience in Latin America during the seventeenth divert resources to ends that the business com-

and eighteenthc enturies,a nd in Asia and Africa munity would have found profitable."T hey find

during the nineteenth and early twentieth cen- that before 1885 investment in the British em-

turies. The main objective of the Spanish and pire had a return2 5 percent higher than that on

the Portuguese colonization was to obtain gold domestic investment,t hough afterwardst he two

and other valuables from America. Soon after converged. Andrew Roberts (1976 p. 193)

the conquest, the Spanish crown grantedr ights writes: "[from] ... 1930 to 1940 Britainh ad kept

to land and labor (the encomienda)a nd set up a for itself 2,400,000 pounds in taxes from the

complex mercantilists ystem of monopolies and Copperbelt,w hile Northern Rhodesia received

trade regulations to extract resources from the from Britain only 136,000 pounds in grants

colonies.7 for development." Similarly, Patrick Manning

Europeans developed the slave trade in Af- (1982) estimates that between 1905 and 1914,

rica for similar reasons. Before the mid-nine- 50 percent of GDP in Dahomey was extracted

teenth century, colonial powers were mostly by the French, and Crawford Young (1994 p.

restrictedt o the African coast and concentrated 125) notes that tax rates in Tunisia were four

on monopolizing tradei n slaves, gold, and other times as high as in France.

valuable commodities-witness the names used Probablyt he most extreme case of extraction

to describe West Aflican countries: the Gold was that of King Leopold of Belgium in the

Coast, the Ivory Coast. Thereafter,c olonial pol- Congo. Gann and Duignan (1979 p. 30) argue

icy was driven in part by an element of super- that following the example of the Dutch in

power rivalry,b ut mostly by economic motives. Indonesia, Leopold's philosophy was that "the

Michael Crowder (1968 p. 50), for example, colonies should be exploited, not by the opera-

notes "it is significantt hat Britain's largest col- tion of a markete conomy, but by state interven-

ony on the West Coast [Nigeria] should have tion and compulsoryc ultivationo f cash crops to

been the one where her tradersw ere most active be sold to and distributedb y the state at con-

and bears out the contention that, for Britain trolled prices." Jean-Philippe Peemans (1975)

... flag followed trade."8L ance E. Davis and calculates that tax rates on Africans in the

Robert A. Huttenback( 1987 p. 307) conclude Congo approached6 0 percent of their income

that "the colonial Empire provides strong evi- during the 1920's and 1930's. Bogumil Jew-

dence for the belief that government was at- siewicki (1983) writes that during the period

when Leopold was directly in charge, policy

was "basedo n the violent exploitationo f natural

and human resources,"w ith a consequent "de-

struction of economic and social life ... [and]

Bates shows that this was mainly because in Kenya, but not

... dismembermento f political structures."

in Ghana, there were a significant number of European

settler farmers, who exerted considerable pressure on Overall, there were few constraintso n state

policy. power in the nonsettler colonies. The colonial

7 See James Lang (1975) and James Lockhart and powers set up authoritariana nd absolutists tates

Stuart B. Schwartz (1983). Migration to Spanish America

with the purposeo f solidifying their control and

was limited by the Spanish Crown, in part because of a

facilitating the extraction of resources. Young

desire to keep control of the colonists and limit their

independence (see, for example, John H. Coatsworth, (1994 p. 101) quotes a Frencho fficial in Africa:

1982). This also gives further support to our notion that "the European commandant is not posted to

settlers were able to influence the type of institutions set observe nature,. .. He has a mission ... to impose

up in the colonies, even against the wishes of the home

regulations, to limit individual liberties..., to

country government.

8 Although in almost all cases the main objective of collect taxes." Manning (1988 p. 84) summa-

colonial policies was to protect economic interests and rizes this as: "In Europe the theories of repre-

obtain profits, the recipients of these profits varied. In the sentative democracy won out over the theorists

Portuguesec ase, it was the state; in the Belgian case, it was

of absolutism.... But in Africa, the European

King Leopold; and in the British case, it was often private

conquerorss et up absolutistg overnments,b ased

enterprisesw ho obtained concessions or monopoly trading

rights in Africa (Crowder, 1968 Part III). on reasoning similar to that of Louis XIV."

1376 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

C. InstitutionalP ersistence There are a numbero f economic mechanisms

that will lead to institutionalp ersistence of this

Therei s a varietyo f historicale vidence,a s well type. Here, we discuss three possibilities.

as our regressionsi n Table 3 below, suggesting

that the controls tructuress et up in the nonsettler (1) Setting up institutionst hat place restrictions

colonies duringt he colonial era persisted,w hile on governmentp ower and enforce property

therei s little doubtt hatt he institutionso f law and rights is costly (see, e.g., Acemoglu and

ordera nd privatep ropertye stablishedd uringt he Thierry Verdier, 1998). If the costs of cre-

early phases of colonialismi n Australia,C anada, ating these institutions have been sunk by

New Zealand,t he United States,H ong Kong, and the colonial powers, then it may not pay the

Singaporeh ave formed the basis of the current- elites at independence to switch to extrac-

day institutionso f these countries.9 tive institutions.I n contrast,w hen the new

Young emphasizes that the extractivei nstitu- elites inherit extractive institutions, they

tions set up by the colonialists persisted long may not want to incur the costs of introduc-

after the colonial regime ended. He writes "al- ing better institutions, and may instead

though we commonly described the indepen- prefer to exploit the existing extractive in-

dent polities as 'new states,' in reality they were stitutions for their own benefits.

successors to the colonial regime, inheritingi ts (2) The gains to an extractive strategy may

structures,i ts quotidian routines and practices, depend on the size of the ruling elite. When

and its more hidden normativet heories of gov- this elite is small, each member would have

ernance" (1994 p. 283). An example of the a larger share of the revenues, so the elite

persistence of extractive state institutions into may have a greater incentive to be extrac-

the independencee ra is provided by the persis- tive. In many cases where Europeanp owers

tence of the most prominente xtractivep olicies. set up authoritarianin stitutions, they dele-

In Latin America, the full panoply of monopo- gated the day-to-dayr unningo f the state to

lies and regulations,w hich had been createdb y a small domestic elite. This narrow group

Spain, remained intact after independence, for often was the one to control the state

most of the nineteenth century. Forced labor after independence and favored extractive

policies persisted and were even intensified or institutions1. 0

reintroducedw ith the expansion of export agri- (3) If agents make irreversiblei nvestmentst hat

culture in the latter part of the nineteenth cen- are complementary to a particular set of

tury. Slavery persisted in Brazil until 1886, and institutions, they will be more willing to

during the sisal boom in Mexico, forced labor supportt hem, making these institutionsp er-

was reintroduceda nd persistedu p to the starto f sist (see, e.g., Acemoglu, 1995). For exam-

the revolution in 1910. Forced labor was also ple, agents who have invested in humana nd

reintroducedi n Guatemala and El Salvador to physical capital will be in favor of spending

provide labor for coffee growing. In the Guate-

malan case, forced labor lasted until the creation

of democracy in 1945. Similarly, forced labor 10 William Reno (1995), for example, argues that the

governmentso f postindependenceS ierraL eone adoptedt he

was reinstated in many independent African

tactics and institutions of the British colonizers to cement

countries, for example, by Mobutu in Zaire.

their political power and extract resources from the rest of

society. CatherineB oone (1992) provides a similar analysis

of the evolution of the modern state in Senegal. Most

scholars also view the roots of authoritarianismu nder

9 The thesis that institutionsp ersist for a long time goes Mobutu in the colonial state practices in the Belgian Congo

back at least to KarlA . Wittfogel( 1957), who arguedt hatt he (e.g., Thomas M. Callaghy, 1984, or Thomas Turner and

controls tructuress et up by the large" hydraulic"em piress uch Young, 1985, especially p. 43). The situation in Latin

as China,R ussia, and the OttomanE mpirep ersistedf or more America is similar. Independenceo f most Latin American

than 500 years to the twentieth century. Engerman and countlies came in the early nineteenthc entury as domestic

Sokoloff (1997), La Porta et al. (1998, 1999), North et al. elites took advantageo f the invasion of Spain by Napoleon

(1998), and Coatsworth( 1999) also argue that colonial insti- to capture the control of the state. But, the only thing that

tutionsp ersisted.E ngermane t al. (1998) providef urthere vi- changed was the identity of the recipients of the rents (see,

dence supportingt his view. for example, Coatsworth, 1978, or John Lynch, 1986).

VOL 91 NO. 5 ACEMOGLUE T AL.: THE COLONIALO RIGINSO F DEVELOPMENT 1377

TABLE1 -DESCRIPTIVSET ATISTICS

By quartiles of mortality

Whole world Base sample (1) (2) (3) (4)

Log GDP per capita (PPP) in 1995 8.3 8.05 8.9 8.4 7.73 7.2

(1.1) (1.1)

Log output per worker in 1988 -1.70 -1.93 -1.03 -1.46 -2.20 -3.03

(with level of United States (1.1) (1.0)

normalizedt o 1)

Average protectiona gainst 7 6.5 7.9 6.5 6 5.9

expropriationr isk, 1985-1995 (1.8) (1.5)

Constrainto n executive in 1990 3.6 4 5.3 5.1 3.3 2.3

(2.3) (2.3)

Constrainto n executive in 1900 1.9 2.3 3.7 3.4 1.1 1

(1.8) (2.1)

Constrainto n executive in first year 3.6 3.3 4.8 2.4 3.1 3.4

of independence (2.4) (2.4)

Democracy in 1900 1.1 1.6 3.9 2.8 0.19 0

(2.6) (3.0)

Europeans ettlements in 1900 0.31 0.16 0.32 0.26 0.08 0.005

(0.4) (0.3)

Log Europeans ettler mortality n.a. 4.7 3.0 4.3 4.9 6.3

(1.1)

Number of observations 163 64 14 18 17 15

Notes: Standardd eviations are in parentheses.M ortalityi s potential settler mortality,m easuredi n terms of deaths per annum

per 1,000 "mean strength"( raw mortalityn umbersa re adjustedt o what they would be if a force of 1,000 living people were

kept in place for a whole year, e.g., it is possible for this numbert o exceed 1,000 in episodes of extreme mortalitya s those

who die are replaced with new arrivals).S ources and methods for mortalitya re described in Section III, subsection B, and

in the unpublishedA ppendix (availablef rom the authors;o r see Acemoglu et al., 2000). Quartileso f mortalitya re for our base

sample of 64 observations.T hese are: (1) less than 65.4; (2) greatert han or equal to 65.4 and less than 78.1; (3) greatert han

or equal to 78.1 and less than 280; (4) greater than or equal to 280. The number of observations differs by variable; see

Appendix Table Al for details.

money to enforce property rights, while and our basic sample, and the standardd evia-

those who have less to lose may not be. tion of log income per capita in both cases is

1.1. In row 3, we also give outputp er workeri n

II. Institutionsa nd Performance: 1988 from Hall and Jones (1999) as an alterna-

OLS Estimates tive measure of income today. Hall and Jones

(1999) prefer this measure since it explicitly

A. Data and Descriptive Statistics refers to worker productivity. On the other

hand, given the difficulty of measuringt he for-

Table 1 provides descriptive statistics for the mal laborf orce, it may be a more noisy measure

key variableso f interest.T he first column is for of economic performance than income per

the whole world, and column (2) is for our base capita.

sample, limited to the 64 countries that were We use a variety of variables to capture in-

ex-colonies and for which we have settler mor- stitutional differences. Our main variable, re-

tality, protectiona gainst expropriationr isk, and ported in the second row, is an index of

GDP data (this is smaller than the sample in protectiona gainst expropriation.T hese data are

Figure 1). The GDP per capita in 1995 is PPP from Political Risk Services (see, e.g., William

adjusted( a more detailed discussion of all data D. Coplin et al., 1991), and were firstu sed in the

sources is provided in Appendix Table Al). economics and political science literaturesb y

Income (GDP) per capitaw ill be our measureo f Knack and Keefer (1995). Political Risk Ser-

economic outcome. There are large differences vices reportsa value between 0 and 10 for each

in income per capita in both the world sample country and year, with 0 correspondingt o the

1378 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

lowest protectiona gainst expropriationW. e use useful since settler mortality is our instrument

the average value for each country between for institutions (this variable is described in

1985 and 1995 (values are missing for many more detail in the next section).

countriesb efore 1985). This measure is appro-

priatef or our purposess ince the focus here is on B. OrdinaryL east-SquaresR egressions

differences in institutions originatingf rom dif-

ferent types of states and state policies. We Table 2 reportso rdinaryl east-squares( OLS)

expect our notion of extractive state to corre- regressions of log per capita income on the

spond to a low value of this index, while the protection against expropriationv ariable in a

traditiono f rule of law and well-enforced prop- variety of samples. The linear regressions are

erty rights should correspondt o high values.11 for the equation

The next row gives an alternativem easure,c on-

straints on the executive in 1990, coded from (1) logyi=i+ aRi+Xy+ ei,

the Polity III data set of Ted Robert Gurr and

associates (an update of Gurr, 1997). Results where yi is income per capita in country i, Ri is

using the constraintso n the executive and other the protectiona gainst expropriationm easure,X i

measuresa re reportedi n Acemoglu et al. (2000) is a vector of other covariates, and ei is a

and are not repeatedh ere. random error term. The coefficient of interest

The next three rows give measures of early throughoutt he paper is a, the effect of institu-

institutions from the same Gurr data set. The tions on income per capita.

first is a measureo f constraintso n the executive Column (1) shows that in the whole world

in 1900 and the second is an index of democ- sample there is a strong correlationb etween our

racy in 1900. This informationi s not available measure of institutions and income per capita.

for countriest hat were still colonies in 1900, so Column (2) shows that the impact of the insti-

we assign these countries the lowest possible tutions variableo n income per capitai n our base

score. In the following row, we reportt he mean sample is quite similar to that in the whole

and standard deviation of constraints on the world, and Figure 2 shows this relationshipd i-

executive in the first year of independence( i.e., agrammaticallyf or our base sample consisting

the first year a country enters the Gurrd ata set) of 64 countries. The R2 of the regression in

as an alternative measure of institutions. The column (1) indicates that over 50 percent of the

second-to-lastr ow gives the fractiono f the pop- variationi n income per capita is associatedw ith

ulation of European descent in 1900, which is variation in this index of institutions. To get a

our measure of Europeans ettlement in the col- sense of the magnitude of the effect of institu-

onies, constructed from McEvedy and Jones tions on performance,l et us comparet wo coun-

(1975) and Curtin et al. (1995). The final row tries, Nigeria, which has approximatelyt he 25th

gives the logarithmo f the baseline settler mor- percentile of the institutional measure in this

tality estimates; the raw data are in Appendix sample, 5.6, and Chile, which has approxi-

Table A2. mately the 75th percentile of the institutions

The remainingc olumns give descriptive sta- index, 7.8. The estimate in column (1), 0.52,

tistics for groups of countries at different quar- indicates that there should be on average a 1.14-

tiles of the settler mortalityd istribution.T his is log-point difference between the log GDPs of

the correspondingc ountries( or approximatelya

2-fold difference-e1 . 14- 1 2.1). In prac-

"

The protection against expropriationv ariable is spe- tice, this GDP gap is 253 log points (approxi-

cifically for foreign investment, since Political and Risk

mately 1-fold). Therefore, if the effect

Services construct these data for foreign investors. How-

ever, as noted by Knack and Keefer (1995), risk of expro- estimated in Table 2 were causal, it would im-

priationo f foreign and domestic investmentsa re very highly ply a fairly large effect of institutions on per-

correlated,a nd risk of expropriationo f foreign investment formance, but still much less than the actual

may be more comparablea cross countries. In any case, all

income gap between Nigeria and Chile.

our results hold also with a variety of other measures of

Many social scientists, including Monte-

institutions( see Tables 4a, b, c, d, and e in Acemoglu et al.,

2000, available from the authors). squieu [1784] (1989), Diamond (1997), and

VOL. 91 NO. 5 ACEMOGLUE T AL.: THE COLONIALO RIGINSO F DEVELOPMENT 1379

TABLE 2-OLS REGRESSIONS

Whole Base Whole Whole Base Base Whole Base

world sample world world sample sample world sample

(1) (2) (3) (4) (5) (6) (7) (8)

Dependent variable

is log output per

Dependent variable is log GDP per capita in 1995 worker in 1988

Average protection 0.54 0.52 0.47 0.43 0.47 0.41 0.45 0.46

against expropriation (0.04) (0.06) (0.06) (0.05) (0.06) (0.06) (0.04) (0.06)

risk, 1985-1995

Latitude 0.89 0.37 1.60 0.92

(0.49) (0.51) (0.70) (0.63)

Asia dummy -0.62 -0.60

(0.19) (0.23)

Africa dummy -1.00 -0.90

(0.15) (0.17)

"Other"c ontinent dummy -0.25 -0.04

(0.20) (0.32)

R2 0.62 0.54 0.63 0.73 0.56 0.69 0.55 0.49

Number of observations 110 64 110 110 64 64 108 61

Notes: Dependentv ariable:c olumns (1)-(6), log GDP per capita (PPP basis) in 1995, currentp rices (from the World Bank's

World DevelopmentI ndicators 1999); columns (7)-(8), log outputp er worker in 1988 from Hall and Jones (1999). Average

protectiona gainste xpropriationr isk is measuredo n a scale from 0 to 10, where a higher score means more protectiona gainst

expropriation,a veraged over 1985 to 1995, from Political Risk Services. Standarde rrorsa re in parentheses.I n regressions

with continentd ummies, the dummy for America is omitted. See Appendix Table Al for more detailed variable definitions

and sources. Of the countries in our base sample, Hall and Jones do not reporto utput per worker in the Bahamas, Ethiopia,

and Vietnam.

Sachs and coauthors, have argued for a direct and (8), we repeat our basic regressions using

effect of climate on performance,a nd Gallup et the log of output per worker from Hall and

al. (1998) and Hall and Jones (1999) document Jones (1999), with very similar results.

the correlationb etween distance from the equa- Overall, the results in Table 2 show a strong

tor and economic performance.T o control for correlation between institutions and economic

this, in columns (3)-(6), we add latitude as a performance.N evertheless, there are a number

regressor (we follow the literaturei n using the of important reasons for not interpretingt his

absolutev alue measureo f latitude,i .e., distance relationship as causal. First, rich economies

from the equator,s caled between 0 and 1). This may be able to afford, or perhapsp refer, better

changes the coefficient of the index of institu- institutions.A rguably more importantt han this

tions little. Latitudei tself is also significanta nd reverse causality problem,t here are many omit-

has the sign found by the previous studies. In ted determinantso f income differences that will

columns (4) and (6), we also add dummies for naturallyb e correlatedw ith institutions.F inally,

Africa, Asia, and other continents, with Amer- the measures of institutions are constructed ex

ica as the omitted group. Although protection post, and the analysts may have had a natural

against expropriationr isk remains significant, bias in seeing betteri nstitutionsi n richerp laces.

the continentd ummies are also statisticallya nd As well as these problems introducingp ositive

quantitativelys ignificant.T he Africa dummy in bias in the OLS estimates, the fact that the

column (6) indicates that in our sample African institutionsv ariable is measuredw ith consider-

countries are 90 log points (approximately1 45 able errora nd correspondsp oorly to the "cluster

percent) poorer even after taking the effect of of institutions"t hat matter in practice creates

institutionsi nto account.F inally, in columns (7) attenuation and may bias the OLS estimates

1380 THEA MERICANE CONOMICR EVIEW DECEMBER2 001

10 HKG S CAN

r) |

~~~~~~H~ ~~~~~MLTBHS

GM PER DOMTW)

IDN

N- 8 SLV BO[GU

. ~~~HTI SDN 'MM TGO

0RD~ ~~~~~~7~ A l NEBRGNDG A

a) EhE TZA

m~ 6m

0

4'

4 6 8 10

Average ExpropriationR isk 1985-95

FIGURE 2. OLS RELATIONSHIP BETWEEN EXPROPRIATION RISK AND INCOME

downwards. All of these problems could be Both malaria and yellow fever are transmit-

solved if we had an instrumentf or institutions. ted by mosquito vectors. In the case of malaria,

Such an instrumentm ust be an importantf actor the main transmitteri s the Anopheles gambiae

in accounting for the institutionalv ariationt hat complex and the mosquito Anophelesf unestus,

we observe, but have no direct effect on perfor- while the main carriero f yellow fever is Aedes

mance. Ourd iscussion in Section I suggests that aegypti. Both malaria and yellow fever vectors

settler mortalityd uring the time of colonization tend to live close to human habitation.

is a plausible instrument. In places where the malariav ector is present,

such as the West African savanna or forest, an

III. Mortalityo f Early Settlers individual can get as many as several hundred

infectious mosquito bites a year. For a person

A. Sources of European Mortality without immunity, malaria (particularlyP las-

in the Colonies modium falciporum) is often fatal, so Europe-

ans in Africa, India, or the Caribbeanf aced very

In this subsection, we give a brief overview high death rates. In contrast,d eath rates for the

of the sources of mortalityf acing potential set- adult local population were much lower (see

tlers. Malaria( particularlyP lasmodiumf alcipo- Curtin [1964] and the discussion in our intro-

rum) and yellow fever were the major sources duction above). Curtin( 1998 pp. 7-8) describes

of European mortality in the colonies. In the this as follows:

tropics, these two diseases accounted for 80

percent of Europeand eaths, while gastrointes- Children in West Africa ... would be in-

tinal diseases accounted for another 15 percent fected with malariap arasitess hortly after

birtha nd were frequentlyr einfecteda fter-

(Curtin,1 989 p. 30). Throughoutt he nineteenth

wards; if they lived beyond the age of

century,a reasw ithoutm alariaa nd yellow fever,

about five, they acquireda n apparenti m-

such as New Zealand, were more healthy than

munity. The parasiter emainedw ith them,

Europe because the major causes of death in normally in the liver, but clinical symp-

Europe-tuberculosis, pneumonia, and small- toms were rare so long as they continued

pox-were rare in these places (Curtin, 1989 to be infected with the same species of P.

p. 13). falciporum.

VOL.9 1 NO. 5 ACEMOGLUE T AL.: THE COLONIALO RIGINSO F DEVELOPMENT 1381

The more recent books on malariology confirm (1998 p. 10) writes: "Because most Africans

this conclusion. For example, "In stable en- had passed through a light case early in life,

demic areas a heavy toll of morbiditya nd mor- yellow fever in West Africa was a strangers'

tality falls on young children but malaria is a disease, attacking those who grew up else-

relatively mild condition in adults"( HerbertM . where." Similarly, Michael B. A. Oldstone

Gilles and David A. Warrell, 1993 p. 64; see (1998 p. 49) writes:

also the classic reference on this topic, Leonard

J. Bruce-Chwatt, 1980 Chapter4 ; Roy Porter, Most Black Africans and their descen-

1996).12S imilarly, the World Health Organiza- dants respond to yellow fever infection

tion (WHO) points out that in endemic malaria with mild to moderate symptoms such as

areas of Africa and the Western Pacific today headache, fever, nausea, and vomiting,

and then recover in a few days. This out-

"... the risk of malaria severity and death is

come reflects the long relationship be-

almost exclusively limited to non-immunes,b e-

tween the virus and its indigenous hosts,

ing most serious for young children over six

who through generations of exposure to

monthso f age... survivingc hildrend evelop their

the virus have evolved resistance.

own immunity between the age of 3-5 years"

(Jose A. Najeraa nd JoahimH empel, 1996). In contrast, fatality rates among nonimmune

People in areas where malariai s endemic are adults, such as Europeans,c ould be as high as

also more likely to have genetic immunity 90 percent.

against malaria.F or example, they tend to have Advances in medical science have reduced

the sickle-cell trait, which discourages the mul- the danger posed by malaria and yellow fever.

tiplicationo f parasitesi n the blood, or deficien- Yellow fever is mostly eradicated (Oldstone,

cies in glucose-6-phosphated ehydrogenasea nd 1998 Chapter 5), and malaria has been eradi-

thalassaemia traits, which also protect against cated in many areas. Europeans developed

malaria. Porter (1996 p. 34) writes: "In such a methods of dealing with these diseases that

process,..., close to 100 percent of Africans graduallyb ecame more effective in the second

acquired a genetic trait that protects them half of the nineteenth century. For example,

against vivax malariaa nd probably against fal- they came to understand that high doses of

ciporumm alariaa s well." Overall,t he WHO es- quinine, derived from the cinchona bark, acted

timatest hat malariak ills about 1 million people as a prophylactic and prevented infection or

per year, most of them children.I t does not, how- reduced the severity of malaria. They also

ever, generallyk ill adultsw ho grew up in malaria- started to undertakes erious mosquito eradica-

endemic areas( see Najeraa nd Hempel, 1996). tion efforts and protectt hemselves against mos-

Although yellow fever's epidemiology is quito bites. Further,E uropeansa lso learnedt hat

quite different from malaria, it was also much an often effective method of reducing mortality

more fatal to Europeanst han to non-Europeans from yellow fever is flight from the area, since

who grew up in areas where yellow fever com- the transmittemr osquito,A edes aegypti,h as only

monly occurred.13 Yellow fever leaves its sur- a short range. Nevertheless,d uringm uch of the

viving victims with a lifelong immunity, which nineteenthc entury,t here was almost a complete

also explains its epidemic pattern,r elying on a misunderstandinogf the natureo f both diseases.

concentrated nonimmune population. Curtin For example, the leading theory for malariaw as

thati t was causedb y "miasma"fr om swamps,a nd

quinine was not used widely. The role of small

collections of water to breed mosquitoes and

12 Because malarias pecies are quite local, a person may

have immunityt o the local version of malaria,b ut be highly transmitt hese diseasesw as not understoodI. t was

vulnerablet o malariaa short distance away. This is proba- only in the late nineteenthc enturyt hatE uropeans

bly the explanationf or why Africans had such high mortal- startedt o controlt hese diseases.1 4

ity when they were forced to move by colonial powers.

(Curtine t al., 1995 p. 463).

13 Because yellow fever struck Europeans as an epi-

demic, many of the very high death rates we reportb elow 14 Even during the early twentieth century, there was

for Europeant roops are from yellow fever. much confusion about the causes of malaria and yellow

1382 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

These considerations,t ogether with the data rates faced by Europeans are unlikely to be a

we have on the mortality of local people and proxy for some simple geographic or climac-

populationd ensities before the arrivalo f Euro- tic feature of the country.

peans, make us believe that settler mortalityi s a

plausible instrument for institutional develop- B. Data on Potential Settler Mortality

ment: these diseases affected European settle-

ment patterns and the type of institutions they Our data on the mortality of European set-

set up, but had little effect on the health and tlers come largely from the work of Philip

economy of indigenous people.15 Curtin. Systematic military medical record

A final noteworthy feature, helpful in in- keeping began only after 1815, as an attempt

terpreting our results below, is that malaria to understand why so many soldiers were

prevalence depends as much on the microcli- dying in some places. The first detailed stud-

mate of an area as on its temperature and ies were retrospective and dealt with British

humidity, or on whether it is in the tropics; forces between 1817 and 1836. The United

high altitudes reduce the risk of infection, so States and French governments quickly

in areas of high altitude, where "hill stations" adopted similar methods (Curtin, 1989 pp. 3,

could be set up, such as Bogota in Colombia, 5). Some early data are also available for the

mortality rates were typically lower than in Dutch East Indies. By the 1870's, most Euro-

wet coastal areas. However, malaria could pean countries published regular reports on

sometimes be more serious in high-altitude the health of their soldiers.

areas. For example, Curtin (1989 p. 47) points The standardm easure is annualized deaths

out that in Ceylon mortality was lower in the per thousand mean strength. This measure

coast than the highlands because rains in the reports the death rate among 1,000 soldiers

coast washed away the larvae of the transmit- where each deathi s replacedw ith a new soldier.

ter mosquitoes. Similarly, in Madras many Curtin (1989, 1998) reviews in detail the con-

coastal regions were free of malaria, while structiono f these estimates for particularp laces

northern India had high rates of infection. and campaigns, and assesses which data should

Curtin (1998 Chapter 7) also illustrates how be considered reliable.

there were marked differences in the preva- Curtin (1989), Death by Migration, deals

lence of malaria within small regions of primarily with the mortality of European

Madagascar. This suggests that mortality troops from 1817 to 1848. At this time mod-

ern medicine was still in its infancy, and the

European militaries did not yet understand

fever. The WashingtonP ost on Nov. 2, 1900 wrote: "Of all how to control malaria and yellow fever.

the silly and nonsensical rigmaroleo f yellow fever that has These mortality rates can therefore be inter-

yet found its way into print ... the silliest beyond comparei s

preted as reasonable estimates of settler mor-

to be found in the argumentsa nd theories generated by a

mosquito hypothesis" (quoted in Oldstone, 1998 pp. tality. They are consistent with substantial

64-65). evidence from other sources (see, for exam-

Many campaigns duringt he nineteenthc enturyh ad very ple, Curtin [1964, 1968]). Curtin (1998), Dis-

high mortality rates. For example, the French campaign in

ease and Empire, adds similar data on the

Madagascard uringt he 1890's and French attemptst o build

mortality of soldiers in the second half of the

the Panama Canal during the 1880's were mortality disas-

ters, the first due to malaria,t he second due to yellow fever nineteenth century.1 6 In all cases, we use the

(see Curtin,1 998, and David McCullogh, 1977). In Panama,

to stop ants the French used water pots under the legs of

beds in barracksa nd hospitals. These pots provideda n ideal

milieu for the breeding of Aedes aegypti, causing very high 16 These numbers have to be used with more care be-

rates of mortality (Oldstone, 1998 p. 66). cause there was a growing awareness of how to avoid

15 In Acemoglu et al. (2001), we documentt hat many of epidemics of the worst tropical diseases, at least during

these areas in the tropical zone were richer and more short military campaigns. For example, the campaign in

densely settled in 1500 than the temperatea reas later settled Ethiopia at the end of the nineteenthc entury had very low

by the Europeans. This also supports the notion that the mortalityr ates because it was short and well managed (see

disease environmentd id not create an absolute disadvantage Figure 1). Although the mortalityr ates from this successful

for these countries. campaign certainly underestimatet he mortalityr ates faced

VOL. 91 NO. 5 ACEMOGLUE T AL: THE COLONIALO RIGINSO F DEVELOPMENT 1383

earliest available number for each country, where R is the measure of currenti nstitutions

reasoning that this is the best estimate of the (protectiona gainst expropriationb etween 1985

mortality rates that settlers would have faced, and 1995), C is our measure of early (circa

at least until the twentieth century. 1900) institutions,S is the measureo f European

The main gap in the Curtin data is for South settlements in the colony (fraction of the popu-

America since the Spanish and Portuguese lation with Europeand escent in 1900), and M is

militaries did not keep good records of mor- mortalityr ates faced by settlers.X is a vector of

tality. Hector Gutierrez (1986) used Vatican covariates that affect all variables.

records to construct estimates for the mortal- The simplest identifications trategy might be

ity rates of bishops in Latin America from to use Si (or Ci) as an instrument for Ri in

1604 to 1876. Because these data overlap equation (1), and we report some of these re-

with the Curtin estimates for several coun- gressions in Table 8. However, to the extent that

tries, we are able to construct a data series for settlers are more likely to migratet o richera reas

South America.17 Curtin (1964) also provides and early institutions reflect other characteris-

estimates of mortality in naval squadrons for tics that are importantf or income today, this

different regions which we can use to gener- identifications trategyw ould be invalid (i.e., Ci

ate alternative estimates of mortality in South and Si could be correlatedw ith sk). Instead, we

America. Appendix B in Acemoglu et al. use the mortalityr ates faced by the settlers, log

(2000), which is available from the authors, Mi, as an instrumentf or Ri. This identification

gives a detailed discussion of how these data strategy will be valid as long as log Mi is

are constructed, and Appendix Table A5 uncorrelatedw ith si-that is, if mortality rates

(available from the authors), shows that these of settlers between the seventeenth and nine-

alternative methods produce remarkably sim- teenth centuriesh ave no effect on income today

ilar results. Appendix Table A2 lists our main other than through their influence on institu-

estimates, and Table Al gives information tional development. We argued above that this

about sources. exclusion restrictioni s plausible.

Figure3 illustratest he relationshipb etweent he

IV. Institutions and Performance: IV Results (potential)s ettlerm ortalityr ates and the index of

institutions.W e use the logarithmo f the settler

A. Determinantso f CurrentI nstitutions mortalityr ates, since there are no theoreticalr ea-

sons to prefert he level as a determinanot f insti-

Equation (1) describes the relationship be- tutions rather than the log, and using the log

tween currenti nstitutions and log GDP. In ad- ensurest hatt he extremeA fricanm ortalityr atesd o

dition we have not play a disproportionatreo le. As it happens,

therei s an almost linearr elationshipb etween the

(2) Ri = AR + OR Ci + X>iYR+ VRi, log settler mortalitya nd our measureo f institu-

tions. This relationships hows that ex-colonies

(3) Ci = AC+ ,Bcsi + Xj')/c + 1Ci, where Europeans faced higher mortality rates

have substantiallyw orse institutionst oday.

(4) Si = As + (351ogM i + X1,yS+ vSi, In Table 3, we documentt hat this relationship

works throught he channelsh ypothesizedi n Sec-

tion I. In particularw, e presentO LS regressionso f

equations( 2), (3), and (4). In the top panel, we

regress the protectiona gainste xpropriationv ari-

by potential settlers in Ethiopia, we did not exclude this

able on the otherv ariables.C olumn( 1) uses con-

country because excluding it would have helped our hy-

pothesis. straintsf aced by the executive in 1900 as the

17 Combining data from a variety of sources will in- regressor,a nd shows a close associationb etween

troduce measurement error in our estimates of settler earlyi nstitutionsa ndi nstitutionst oday.F or exam-

mortality. Nevertheless, since we are using settler mor-

ple, past institutionsa lone explain 20 percento f

tality as an instrument, this measurement error does not

the variationi n the index of currenti nstitutions.

lead to inconsistent estimates of the effect of institutions

on performance. The second column adds the latitude variable,

1384 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

10 USA

NZL CAN

AUS SGP

C)

co) IND GMB

v 8 ' MYS ,fflLANGAB

0) K

^~~~~J~ALM -F,6

i?r) Z A

._ T ~~~~~G~I~N~GHC MR

NABGA MDG

4 SDN MLI

4 ~~~~~~~~~~~HTI

ZAR

2 4 6 8

Log of Settler Mortality

FIGURE 3. FIRST-STAGE RELATIONSHIP BETWEEN SETTLER MORTALITY AND EXPROPRIATION RISK

with little effect on the estimate.C olumns( 3) and supporto f the hypothesis that early institutions

(4) use the democracy index, and confirm the were shaped, at least in part,b y settlements,a nd

resultsi n columns (1) and (2). that settlementsw ere affected by mortality.C ol-

Both constraintso n the executive and democ- umns (1)-(2) and (5)-(6) relate our measure of

racy indices assign low scores to countries that constraint on the executive and democracy in

were colonies in 1900, and do not use the ear- 1900 to the measure of Europeans ettlementsi n

liest postindependence information for Latin 1900 (fraction of the population of European

American countries and the Neo-Europes. In decent). Columns (3)-(4) and (7)-(8) relate the

columns (5) and (6), we adopt an alternative same variablest o settlerm ortality.T hese regres-

approacha nd use the constraintso n the execu- sions show thats ettlementp atternse xplaina round

tive in the first year of independence and also 50 percent of the variationi n early institutions.

control separatelyf or time since independence. Finally, columns (9) and (10) show the relation-

The results are similar, and indicate that early ship between settlementsa nd mortalityr ates.

institutionst end to persist.

Columns (7) and (8) show the associationb e- B. Institutionsa nd Economic Performance

tween protectiona gainste xpropriationa nd Euro-

pean settlements.T he fraction of Europeansi n Two-stage least-squares estimates of equa-

1900 alone explains approximately3 0 percento f tion (1) are presented in Table 4. Protection

the variationi n our institutionsv ariable today. against expropriationv ariable, Ri, is treated as

Columns (9) and (10) show the relationshipb e- endogenous, and modeled as

tween the protectiona gainst expropriationv ari-

able and the mortalityr atesf aced by settlers.T his

(5) Ri = + log Mi + X'8 + vi,

specificationw ill be the first stage for our main

two-stagel east-squarees stimates( 2SLS).I t shows

that settlerm ortalitya lone explains2 7 percento f where Mi is the settler mortality rate in 1,000

the differencesi n institutionsw e observe today. mean strength.T he exclusion restrictioni s that

Panel B of Table 3 provides evidence in this variable does not appeari n (1).

VOL.9 1 NO. 5 ACEMOGLUE T AL.: THE COLONIALO RIGINSO F DEVELOPMENT 1385

TABLE 3-DETERMINANTS OF INSTITUTIONS

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Panel A Dependent Variable Is Average Protection Against ExpropriationR isk in 1985-1995

Constrainto n executive in 0.32 0.26

1900 (0.08) (0.09)

Democracy in 1900 0.24 0.21

(0.06) (0.07)

Constrainto n executive in first 0.25 0.22

year of independence (0.08) (0.08)

Europeans ettlements in 1900 3.20 3.00

(0.61) (0.78)

Log Europeans ettler mortality -0.61 -0.51

(0.13) (0.14)

Latitude 2.20 1.60 2.70 0.58 2.00

(1.40) (1.50) (1.40) (1.51) (1.34)

R2 0.2 0.23 0.24 0.25 0.19 0.24 0.3 0.3 0.27 0.3

Number of observations 63 63 62 62 63 63 66 66 64 64

Dependent

Variable Is

European

Dependent Variable Is Constraint Dependent Variable Is Settlements in

Panel B on Executive in 1900 Democracy in 1900 1900

Europeans ettlements in 1900 5.50 5.40 8.60 8.10

(0.73) (0.93) (0.90) (1.20)

Log Europeans ettler mortality -0.82 -0.65 -1.22 -0.88 -0.11 -0.07

(0.17) (0.18) (0.24) (0.25) (0.02) (0.02)

Latitude 0.33 3.60 1.60 7.60 0.87

(1.80) (1.70) (2.30) (2.40) (0.19)

R2 0.46 0.46 0.25 0.29 0.57 0.57 0.28 0.37 0.31 0.47

Number of observations 70 70 75 75 67 67 68 68 73 73

Notes: All regressions are OLS. Standarde rrorsa re in parentheses.R egressions with constrainto n executive in first year of

independencea lso include years since independencea s a regressor.A verage protectiona gainst expropriationr isk is on a scale

from 0 to 10, where a higher score means more protection against expropriationo f private investment by government,

averagedo ver 1985 to 1995. Constrainto n executive in 1900 is on a scale from 1 to 7, with a higher score indicating more

constraints. Democracy in 1900 is on a scale from 0 to 10, with a higher score indicating more democracy. European

settlements is percent of populationt hat was Europeano r of Europeand escent in 1900. See Appendix Table Al for more

detailed variable definitions and sources.

Panel A of Table 4 reports 2SLS estimates estimate of the impact of institutionso n income

of the coefficient of interest, a from equation per capita is 0.94. This estimate is highly sig-

(1) and Panel B gives the corresponding first nificantw ith a standarde rroro f 0.16, and in fact

stages.18 Column (1) displays the strong first- larger than the OLS estimates reported in

stage relationshipb etween (log) settler mortal- Table 2. This suggests that measuremente rror

ity and currenti nstitutions in our base sample, in the institutions variables that creates attenu-

also shown in Table 3. The corresponding2 SLS ation bias is likely to be more importantt han

reverse causality and omitted variables biases.

Here we are referring to "measuremente rror"

18 We have also run these regressions with standard broadly construed. In reality the set of institu-

errorsc orrectedf or possible clusteringo f the mortalityr ates

tions that matter for economic performancei s

assigned to countriesi n the same disease environment.T his

very complex, and any single measurei s bound

clustering has little effect on the standarde rrors, and does

not change our results. to capture only part of the "true institutions,"

1386 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

TABLE4 -IV REGRESSIONOSF LOG GDP PERC APITA

Base

Base Base sample,

Base Base sample sample dependent

Base sample Base sample sample sample with with variable is

Base Base without without without without continent continent log output

sample sample Neo-Europes Neo-Europes Africa Africa dummies dummies per worker

(1) (2) (3) (4) (5) (6) (7) (8) (9)

Panel A: Two-Stage Least Squares

Average protection against 0.94 1.00 1.28 1.21 0.58 0.58 0.98 1.10 0.98

expropriationr isk 1985-1995 (0.16) (0.22) (0.36) (0.35) (0.10) (0.12) (0.30) (0.46) (0.17)

Latitude -0.65 0.94 0.04 -1.20

(1.34) (1.46) (0.84) (1.8)

Asia dummy -0.92 -1.10

(0.40) (0.52)

Africa dummy -0.46 -0.44

(0.36) (0.42)

"Other"c ontinent dummy -0.94 -0.99

(0.85) (1.0)

Panel B: First Stage for Average ProtectionA gainst ExpropriationR isk in 1985-1995

Log Europeans ettler mortality -0.61 -0.51 -0.39 -0.39 -1.20 -1.10 -0.43 -0.34 -0.63

(0.13) (0.14) (0.13) (0.14) (0.22) (0.24) (0.17) (0.18) (0.13)

Latitude 2.00 -0.11 0.99 2.00

(1.34) (1.50) (1.43) (1.40)

Asia dummy 0.33 0.47

(0.49) (0.50)

Africa dummy -0.27 -0.26

(0.41) (0.41)

"Other"c ontinent dummy 1.24 1.1

(0.84) (0.84)

R2 0.27 0.30 0.13 0.13 0.47 0.47 0.30 0.33 0.28

Panel C: OrdinaryL east Squares

Average protection against 0.52 0.47 0.49 0.47 0.48 0.47 0.42 0.40 0.46

expropriationr isk 1985-1995 (0.06) (0.06) (0.08) (0.07) (0.07) (0.07) (0.06) (0.06) (0.06)

Number of observations 64 64 60 60 37 37 64 64 61

Notes:T he dependentv ariablei n columns (1)-(8) is log GDP per capita in 1995, PPP basis. The dependentv ariablei n column (9) is log output

per worker,f rom Hall and Jones (1999). "Averagep rotectiona gainst expropriationr isk 1985-1995" is measuredo n a scale from 0 to 10, where

a higher score means more protection against risk of expropriationo f investment by the government, from Political Risk Services. Panel A

reportst he two-stage least-squarese stimates, instrumentingf or protectiona gainst expropriationr isk using log settler mortality;P anel B reports

the correspondingf irst stage. Panel C reportst he coefficient from an OLS regressiono f the dependentv ariablea gainst averagep rotectiona gainst

expropriationr isk. Standarde rrorsa re in parentheses.I n regressionsw ith continentd ummies, the dummy for Americai s omitted. See Appendix

Table Al for more detailed variable descriptionsa nd sources.

creating a typical measuremente rror problem. Does the 2SLS estimate make quantitative

Moreover, what matters for current income is sense? Does it imply that institutionadl ifferences

presumablyn ot only institutionst oday, but also can explain a significantf ractiono f income dif-

institutionsi n the past. Our measure of institu-

tions which refers to 1985-1995 will not be

perfectly correlatedw ith these.19 sure as an instrumentf or the protection against expropria-

tion index would solve the measuremente rror,b ut not the

endogeneity problem. This exercise leads to an estimate of

the effect of protection against expropriatione qual to 0.87

19 W e can ascertain,t o some degree, whether the differ- (with standarde rror0 .16). This suggests that "measurement

ence between OLS and 2SLS estimates could be due to error"i n the institutions variables (or the "signal-to-noise

measuremente rror in the institutions variable by making ratio" in the institutions variable) is of the right order of

use of an alternativem easure of institutions, for example, magnitude to explain the difference between the OLS and

the constraintso n the executive measure. Using this mea- 2SLS estimates.

VOL.9 1 NO. 5 ACEMOGLUE T AL.: THE COLONIALO RIGINSO F DEVELOPMENT 1387

ferencesa crossc ountries?L et us once againc om- In columns( 7) and (8), we add continentd um-

pare two "typical"c ountriesw ith high and low mies to the regressions (for Africa, Asia, and

expropriationri sk, Nigeriaa nd Chile (these coun- other, with America as the omitted group). The

tries are typicalf or the IV regressioni n the sense additiono f these dummies does not change the

that they are practicallyo n the regressionl ine). estimatede ffect of institutions,a nd the dummies

Our 2SLS estimate, 0.94, implies that the 2.24 are jointly insignificant at the 5-percent level,

differences in expropriationr isk between these thought he dummyf or Asia is significantlyd iffer-

two countriess hould translatei nto 206 log point ent fromt hato f America.T he fact thatt he African

(approximatel7y- fold) difference.I n practice,t he dummy is insignificants uggests that the reason

presence of measuremente rror complicatest his why African countriesa re poorer is not due to

interpretationb,e cause some of the differenceb e- cultural or geographic factors, but mostly ac-

tween Nigeria and Chile's expropriationi ndex countedf or by the existence of worse institutions

may reflect measuremente rror. Therefore, the in Africa. Finally, in column (9) we repeat our

7-fold differencei s an upperb ound.I n any case, basic regressionu sing log of outputp er workera s

the estimatesi n Table 4 imply a substantialb, ut calculatedb y Hall and Jones (1999). The resulti s

not implausiblyl arge,e ffect of institutionadl iffer- veiy close to our baseliner esult.T he 2SLS coef-

ences on income per capita. ficient is 0.98 insteado f 0.94 as in column (1).22

Colunm (2) shows that adding latitude does This shows thatw hetherw e use incomep er capita

not change the relationship; the institutions or outputp er workerh as littlee ffect on ourr esults.

coefficient is now 1.00 with a standarde rroro f Overall,t he resultsi n Table 4 show a large effect

0.22.20 Remarkably,t he latitude variable now of institutionso n economic performanceI. n the

has the "wrong"s ign and is insignificant. This rest of the paper,w e investigatet he robustnesso f

result suggests that many previous studies may these results. 3

have found latitude to be a significant determi-

nant of economic performance because it is

correlatedw ith institutions (or with the exoge-

nous component of institutionsc aused by early

the protection against expropriationv ariable becomes con-

colonial experience). siderably weaker, and the 2SLS effect of institutions is no

Columns( 3) and (4) documentt hat our results longer significant. The 2SLS effect of institutionsc ontinue

are not driven by the Neo-Europes.W hen we to be significantw hen we use some (but not all) measureso f

institutions. Therefore, we conclude that the relationship

exclude the United States,C anada,A ustralia,a nd

between settler mortality and institutions is weaker within

New Zealand,t he estimatesr emainh ighly signif-

Africa.

icant,a ndi n fact increasea little.F or example,t he 22 The results with other covariates are also very similar.

coefficient for institutionsi s now 1.28 (s.e. = We repeated the same regressions using a variety of alter-

0.36) withoutt he latitudec ontrol,a nd 1.21 (s.e. = native measures of institutions,i ncluding constraintso n the

executive from the Polity III data set, an index of law and

0.35) when we controlf or latitude.C olumns (5)

order tradition from Political Risk Services, a measure of

and (6) show that our results are also robust to propertyr ights from the Heritage Foundation,a measure of

droppinga ll the Africanc ountriesf rom our sam- rule of law from the Fraser Institute, and the efficiency

ple. The estimates without Africa are somewhat of the judiciary from Business International.T he results

and the magnitudes are very similar to those reported in

smaller,b ut also more precise. For example, the

Table 4. We also obtainedv ery similarr esults with the 1970

coefficient for institutionsi s 0.58 (s.e. = 0.1)

values for the constraintso n the executive and income per

withoutt he latitudec ontrol,a nd still 0.58 (s.e. = capita in 1970, which show that the relationship between

0.12) when we controlf or latitude.21 institutional measures and income per capita holds across

time periods. These results are reportedi n the Appendix of

the working paper version, and are also available from the

authors.

20 In 2SLS estimation, all covariatest hat are included in 23 In the working paperv ersion, we also investigatedt he

the second stage, such as latitude, are also included in the robustnesso f our results in different subsamplesw ith vary-

first stage. When these first-stage effects are of no major ing degrees of data quality and different methods of con-

significance for our argument,w e do not reportt hem in the structing the mortality estimates. The results change very

tables to save space. little, for example, when we use data only from Curtin

21 We should note at this point that if we limit the sample (1989), Death by Migration, when we do not assign mor-

to African countries only, the first-stager elationshipu sing tality rates from neighboring disease environments, when

1388 THEA MERICANE CONOMICR EVIEW DECEMBER2 001

V. Robustness pears that British colonies are found to perform

substantiallyb etter in other studies in large part

A. Additional Controls because Britain colonized places where settle-

ments were possible, and this made British col-

The validity of our 2SLS results in Table 4 onies inherit better institutions. To further

dependso n the assumptiont hats ettlerm ortalityin investigate this issue, columns (3) and (4) esti-

the past has no directe ffect on currente conomic mate our basic regression for British colonies

performanceA. lthought his presumptiona ppears only. They show that both the relationshipb e-

reasonable( at least to us), here we substantiateit tween settler mortalitya nd institutionsa nd that

furtherb y directly controllingf or many of the between institutions and income in this sample

variablest hat could plausibly be correlatedw ith of 25 British colonies are very similar to those

boths ettlerm ortalitya nde conomico utcomes,a nd in our base sample. For example, the 2SLS

checking whethert he additiono f these variables estimate of the effect of institutions on income

affects our estimates.24O verall,w e find that our is now 1.07 (s.e. = 0.24) without controllingf or

resultsc hanger emarkablyli ttle with the inclusion latitude and 1.00 (s.e. = 0.22) with latitude.

of these variablesa, ndm anyv ariablese mphasized These results suggest that the identity of the

in previous work become insignificanto nce the colonizer is not an important determinant of

effect of institutionsi s controlledf or. colonization patterns and subsequent institu-

La Porta et al. (1999) argue for the impor- tional development.

tance of colonial origin (identity of the main von Hayek (1960) and La Porta et al. (1999)

colonizing country) as a determinanto f current also emphasizet he importanceo f legal origin. In

institutions.T he identity of the colonial power columns( 5) and( 6), we controlf or legal origin.I n

could also matter because it might have an our sample, all countriesh ave either French or

effect through culture, as argued by David Britishl egal origins, so we simply add a dummy

S. Landes (1998). In columns (1) and (2) of for French legal origin (many countriest hat are

Table 5, we add dummiesf or British and French not Frenchc olonies nonethelessh ave Frenchl egal

colonies (colonies of other nations are the omit- origin). Our estimateo f the effect of institutions

ted group). This has little affect on our results. on income per capitai s unaffected.26

Moreover, the French dummy in the first An argument dating back to Max Weber

stage is estimated to be zero, while the British views religion as a key determinanto f economic

dummy is positive, and marginally significant. performance.T o control for this, in columns (7)

Therefore, as suggested by La Porta et al. and (8), we add the fraction of the populations

(1998), British colonies appear to have better that are Catholic, Muslim, and of other reli-

institutions,b ut this effect is much smaller and gions, with Protestantsa s the omitted group. In

weaker than in a specification that does not the table we report the joint significance level

control for the effect of settler mortality on (p-value) of the corresponding F-statistic for

institutional development.25 Therefore, it ap- these dummies as well as the 2SLS estimate of

the use dataf or LatinA mericaf rom naval stationsi nstead of ically, Britishc olonies have, on average,a n index of institution

bishops, and when we do not use data from small African that is 0.63 points lower. Given the 2SLS estimate of 1.10,

samples. These results are available in Appendix Table A5 this translates into 69 log points higher income per capita

available from the authors,o r in Acemoglu et al. (2000). for British colonies (1.10 X 63 69). The second-stage

24 Joseph N. Altonji et al. (2000) develop an econometric effect of being a British colony is -78 log points, im-

methodology to assess the importanceo f omitted variable plying -9 log point (approximately 10 percent) negative

bias. The basic idea is that if the estimate of the coefficient net effect of being a British colony. A possible explana-

of interest does not change as additional covariates are tion for this pattern is that (Anglo-Saxon?) researchers

included in the regression, it is less likely to change if we are overestimating how "bad"F rench institutions are, and

were able to add some of the missing omitted variables.O ur the second-stage regression is correcting for this.

methodology here is an informal version of this approach. 26 The first stage shows that French legal origin is asso-

25 Moreover,t he British colonial dummy is negative and ciated with worse institutions,b ut similarly,t he net effect of

significantin the seconds tage.T he net effect of being a British having French legal origin is actually positive: -67 X

colony on income per capitai s in fact negative.M ore specif- 1.1 + 89 = 15 log points (approximately1 5 percent).

VOL. 91 NO. 5 ACEMOGLUE TAL.: THE COLONIALO RIGINSO F DEVELOPMENT 1389

TABLE 5-IV REGRESSIONS OF LOG GDP PER CAPITA WITH ADDITIONAL CONTROLS

British British

Base Base colonies colonies Base Base Base Base Base

sample sample only only sample sample sample sample sample

(1) (2) (3) (4) (5) (6) (7) (8) (9)

Panel A: Two-Stage Least Squares

Average protectiona gainst 1.10 1.16 1.07 1.00 1.10 1.20 0.92 1.00 1.10

expropriationr isk, 1985-1995 (0.22) (0.34) (0.24) (0.22) (0.19) (0.29) (0.15) (0.25) (0.29)

Latitude -0.75 -1.10 -0.94 -1.70

(1.70) (1.56) (1.50) (1.6)

British colonial dummy -0.78 -0.80

(0.35) (0.39)

French colonial dummy -0.12 -0.06 0.02

(0.35) (0.42) (0.69)

French legal origin dummy 0.89 0.96 0.51

(0.32) (0.39) (0.69)

p-value for religion variables [0.001] [0.004] [0.42]

Panel B: First Stage for Average Protection Against ExpropriationR isk in 1985-1995

Log Europeans ettler mortality -0.53 -0.43 -0.59 -0.51 -0.54 -0.44 -0.58 -0.44 -0.48

(0.14) (0.16) (0.19) (0.14) (0.13) (0.14) (0.13) (0.15) (0.18)

Latitude 1.97 2.10 2.50 2.30

(1.40) (1.30) (1.50) (1.60)

British colonial dummy 0.63 0.55

(0.37) (0.37)

French colonial dummy 0.05 -0.12 -0.25

(0.43) (0.44) (0.89)

French legal origin -0.67 -0.7 -0.05

(0.33) (0.32) (0.91)

R2 0.31 0.33 0.30 0.30 0.32 0.35 0.32 0.35 0.45

Panel C: OrdinaryL east Squares

Average protection against 0.53 0.47 0.61 0.47 0.56 0.56 0.53 0.47 0.47

expropriationr isk, 1985-1995 (0.19) (0.07) (0.09) (0.06) (0.06) (0.06) (0.06) (0.06) (0.06)

Number of observations 64 64 25 25 64 64 64 64 64

Notes: Panel A reportst he two-stagel east-squarese stimatesw ith log GDP per capita( PPP basis) in 1995 as dependentv ariable,

and PanelB reportst he correspondingfi rsts tage.T he base case in columns( 1) and (2) is all colonies thatw ere neitherF renchn or

British.T he religionv ariablesa re includedi n the firsts tage of columns( 7) and (8) but not reportedh ere (to save space). Panel C

reportst he OLS coefficientf rom regressingl og GDP per capita on averagep rotectiona gainste xpropriationr isk, with the other

controlv ariablesi ndicatedi n thatc olumn (full resultsn ot reportedt o save space). Standarde rrorsa re in parenthesesa ndp -values

for joint significancet ests are in brackets.T he religion variablesa re percentageo f populationt hat are Catholics,M uslims, and

"other"r eligions;P rotestanits the base case. Our samplei s all eitherF rencho r Britishl egal origin (as definedb y La Portae t al.,

1999).

the effect of institutions.27F inally, column (9) correlated with climate and other geographic

adds all the variables in this table simulta- characteristics. Our instrument may therefore

neously. Again, these controls have very little be picking up the direct effect of these vari-

effect on our main estimate. ables. We investigate this issue in Table 6. In

Another concern is that settler mortality is columns (1) and (2), we add a set of temper-

ature and humidity variables (all data from

Philip M. Parker, 1997). In the table we

27 The religion dummies are significanti n the first stage, report joint significance levels for these vari-

but once again they are estimated to have offsetting effects

ables. Again, they have little effect on our

in the second stage, implying little net effect of religion on

income. estimates.

1390 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

TABLE6 -ROBUSTNESS CHECKSF ORI V REGRESSIONOSF LOG GDP PERC APITA

Base Base Base Base Base Base Base Base Base

sample sample sample sample sample sample sample sample sample

(1) (2) (3) (4) (5) (6) (7) (8) (9)

Panel A: Two-Stage Least Squares

Average protection against 0.84 0.83 0.96 0.99 1.10 1.30 0.74 0.79 0.71

expropriationr isk, 1985-1995 (0.19) (0.21) (0.28) (0.30) (0.33) (0.51) (0.13) (0.17) (0.20)

Latitude 0.07 -0.67 -1.30 -0.89 -2.5

(1.60) (1.30) (2.30) (1.00) (1.60)

p-value for temperaturev ariables [0.96] [0.97] [0.77]

p-value for humidity variables [0.54] [0.54] [0.62]

Percent of Europeand escent in 1975 -0.08 0.03 0.3

(0.82) (0.84) (0.7)

p-value for soil quality [0.79] [0.85] [0.46]

p-value for naturalr esources [0.82] [0.87] [0.82]

Dummy for being landlocked 0.64 0.79 0.75

(0.63) (0.83) (0.47)

Ethnolinguisticf ragmentation -1.00 -1.10 -1.60

(0.32) (0.34) (0.47)

Panel B: First Stage for Average ProtectionA gainst ExpropriationR isk in 1985-1995

Log Europeans ettler mortality -0.64 -0.59 -0.41 -0.4 -0.44 -0.34 -0.64 -0.56 -0.59

(0.17) (0.17) (0.14) (0.15) (0.16) (0.17) (0.15) (0.15) (0.21)

Latitude 2.70 0.48 2.20 2.30 4.20

(2.00) (1.50) (1.50) (1.40) (2.60)

R2 0.39 0.41 0.34 0.34 0.41 0.43 0.27 0.30 0.59

Panel C: OrdinaryL east Squares

Average protection against 0.41 0.38 0.39 0.38 0.46 0.42 0.46 0.45 0.38

expropriationr isk, 1985-1995 (0.06) (0.06) (0.06) (0.06) (0.07) (0.07) (0.05) (0.06) (0.06)

Notes: Panel A reportst he two-stage least-squarese stimates with log GDP per capita (PPP basis) in 1995, and Panel B reports

the correspondingf irst stages. Panel C reportst he OLS coefficient from regressingl og GDP per capita on average protection

against expropriationr isk, with the other control variables indicated in that column (full results not reportedt o save space).

Standard errors are in parentheses and p-values for joint significance tests are in brackets. All regressions have 64

observations,e xcept those including naturalr esources, which have 63 observations.T he temperaturea nd humidity variables

are: average, minimum, and maximum monthly high temperaturesa, nd minimum and maximum monthly low temperatures,

and morning minimum and maximum humidity, and afternoon minimum and maximum humidity (from Parker, 1997).

Measureso f naturalr esourcesa re:p ercento f world gold reserves today, percento f world iron reservest oday, percento f world

zinc reserves today, numbero f minerals present in country, and oil resources (thousandso f barrelsp er capita). Measures of

soil quality/climatea re steppe (low latitude),d esert (low latitude),s teppe (middle latitude),d esert (middle latitude),d ry steppe

wasteland, desert dry winter, and highland. See Appendix Table Al for more detailed variable definitions and sources.

A related concern is that in colonies where nificant, with a coefficient of 0.96 (s.e. =

Europeans settled, the currentp opulation con- 0.28). In columns (5) and (6), we control for

sists of a higher fraction of Europeans. One measures of natural resources, soil quality (in

might be worried that we are capturing the practice soil types), and for whether the coun-

direct effect of having more Europeans (who try is landlocked. All these controls are insig-

perhaps brought a "Europeanc ulture" or spe- nificant, and have little effect on our 2SLS

cial relations with Europe). To control for estimate of the effect of institutions on in-

this, we add the fraction of the population of come per capita.

European descent in columns (3) and (4) of In columns (7) and (8), we include ethno-

Table 6. This variable is insignificant, while linguistic fragmentation as another control

the effect of institutions remains highly sig- and treat it as exogenous. Now the coefficient

VOL. 91 NO. S ACEMOGLUE T AL: THE COLONIALO RIGINSO F DEVELOPMENT 1391

of protection against expropriation is 0.74 areas have developed some immunity to the

(s.e. = 0.13), which is only slightly smaller disease (see the discussion in Section III, sub-

than our baseline estimate. In Appendix A, we section A). Malaria should thereforeh ave little

show that the inclusion of an endogenous direct effect on economic performance( though,

variable positively correlated with income or obviously, it will have very high social costs).

institutions will bias the coefficient on insti- In contrast,f or Europeans,o r anyone else who

tutions downwards. Since ethnolinguistic has not been exposed to malaria as a young

fragmentationi s likely to be endogenous with child, malaria is usually fatal, making malaria

respect to development (i.e., ethnolinguistic prevalence a key determinanto f Europeans et-

fragmentationt ends to disappear after the for- tlements and institutionald evelopment.

mation of centralized markets; see Weber In any case, controlling for malariad oes not

[1976] or Andersen [1983]) and is correlated change our results. We do this in columns (1)

with settler mortality, the estimate of 0.74 and (2) by controlling for the fraction of the

likely understates the effect of institutions on population who live in an area where falcipo-

income. In column (9) of Table 6, we include rum malariai s endemic in 1994 (as constructed

all these variables together. Despite the large and used by Gallup et al., 1998). Since malaria

number of controls, protection against expro- prevalence in 1994 is highly endogenous, the

priation on income per capita is still highly argumenti n Appendix A implies that control-

significant, with a somewhat smaller coeffi- ling for it directly will underestimatet he effect

cient of 0.71 (s.e. = 0.20), which is again of institutions on performance.I n fact, the co-

likely to understate the effect of institutions efficient on protection against expropriationi s

on income because ethnolinguistic fragmen- now estimated to be somewhat smaller, 0.69

tation is treated as exogenous. instead of 0.94 as in Table 4. Nevertheless,

Finally, in Table 7, we investigate whether the effect remainsh ighly significantw ith a stan-

our instrumentc ould be capturing the general dard error of 0.25, while malaria itself is

effect of disease on development. Sachs and a insignificant.

series of coauthorsh ave argued for the impor- In a comment on the working paper version

tance of malaria and other diseases in explain- of our study, John W. McArthur and Sachs

ing African poverty (see, for example, Bloom (2001) discuss the role of geography and insti-

and Sachs, 1998; Gallup and Sachs, 1998; tutions in determining economic performance.

Gallup et al., 1998). Since malaria was one of They accept our case for the importance of

the main causes of settler mortality, our esti- institutions,b ut argue that more general speci-

mate may be capturingt he direct effect of ma- fications show that the disease environmenta nd

laria on economic performance. We are health characteristicso f countries (their "geog-

skeptical of this arguments ince malariap reva- raphy") matter for economic performance. In

lence is highly endogenous; it is the poorer particular,t hey extend our work by controlling

countriesw ith worse institutionst hat have been for life expectancy and infant mortality, and

unable to eradicatem alaria.28W hile Sachs and they also instrumentf or these health variables

coauthors argue that malaria reduces output using geographic variables such as latitude and

throughp oor health, high mortality,a nd absen- mean temperature.T able 7 also expands upon

teeism, most people who live in high malaria the specificationst hat McArthura nd Sachs sug-

gest. Columns (3)-(6) include life expectancy

and infant mortalitya s exogenous controls. The

28 For example,t he United States eliminatedm alariaf rom estimates show a significant effect of institu-

the Panama Canal Zone, and Australia eliminated it from

tions on income, similar to, but smaller than,

Queensland( see Crosby, 1986 pp. 141-42). Even in Africa,

there have been very successful campaignsa gainst malaria, our baseline estimates. Infant mortality is also

includingt hose in Algeriaa nd thatc onductedb y the Rio-Tinto marginally significant. Since health is highly

Zinc mining company in Zambia (then NorthernR hodesia). endogenous, the coefficient on these variables

The WHO's Roll Back Malariap rogramc ontainsa numbero f

will be biased up, while the coefficient of insti-

effective recommendationsf or controlling malaria that are

relatively straightforwardt o implement if families have tutions will be biased down (see Appendix A).

enough money (e.g., insecticide-treatebde d nets). These estimates are therefore consistent with

1392 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

TABLE7 -GEOGRAPHY AND HEALTHV ARIABLES

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (1 1)

Yellow fever

instrumenfto r

average

Instrunientingo nly for average Instrumentingf or all protectiona gainst

protection against expropriationr isk right-hand-sidev ariables expropriationri sk

Panel A: Two-Stage Least Squares

Average protection against 0.69 0.72 0.63 0.68 0.55 0.56 0.69 0.74 0.68 0.91 0.90

expropriationr isk, 1985-1995 (0.25) (0.30) (0.28) (0.34) (0.24) (0.31) (0.26) (0.24) (0.23) (0.24) (0.32)

Latitude -0.57 -0.53 -0.1

(1.04) (0.97) (0.95)

Malaria in 1994 -0.57 -0.60 -0.62

(0.47) (0.47) (0.68)

Life expectancy 0.03 0.03 0.02

(0.02) (0.02) (0.02)

Infant mortality -0.01 -0.01 -0.01

(0.005) (0.006) (0.01)

Panel B: First Stage for Average Protection Against ExpropriationR isk in 1985-1995

Log Europeans ettler mortality -0.42 -0.38 -0.34 -0.30 -0.36 -0.29 -0.41 -0.40 -0.40

(0.19) (0.19) (0.17) (0.18) (0.18) (0.19) (0.17) (0.17) (0.17)

Latitude 1.70 1.10 1.60 -0.81 -0.84 -0.84

(1.40) (1.40) (1.40) (1.80) (1.80) (1.80)

Malaria in 1994 -0.79 -0.65

(0.54) (0.55)

Life expectancy 0.05 0.04

(0.02) (0.02)

Infant mortality -0.01 -0.01

(0.01) (0.01)

Mean temperature -0.12 -0.12 -0.12

(0.05) (0.05) (0.05)

Distance from coast 0.57 0.55 0.55

(0.51) (0.52) (0.52)

Yellow fever dummy -1.10 -0.81

(0.41) (0.38)

R2 0.3 0.31 0.34 0.35 0.32 0.34 0.37 0.36 0.36 0.10 0.32

Panel C: OrdinaryL east Squares

Average protection against 0.35 0.35 0.28 0.28 0.29 0.28 0.35 0.29 0.29 0.48 0.39

expropriationr isk, 1985-1995 (0.06) (0.06) (0.05) (0.05) (0.05) (0.05) (0.06) (0.05) (0.05) (0.06) (0.06)

Numnbeor f observations 62 62 60 60 60 60 60 59 59 64 64

Notes: Panel A reports the two-stage least-squares estimates with log GDP per capita (PPP basis) in 1995, and Panel B reports the

corresponding first stages. Panel C reports the coefficient from an OLS regression with log GDP per capita as the dependent variable and

average protection against expropriation risk and the other control variables indicated in each column as independent variables (full

results not reported to save space). Standard errors are in parentheses. Columns (1)-(6) instrument for average protection against

expropriation risk using log mortality and assume that the other regressors are exogenous. Columns (7)-(9) include as instruments

average temperature, amount of territory within 100 km of the coast, and latitude (from McArthur and Sachs, 2001). Columns (10)

and (11) use a dummy variable for whether or not a country was subject to yellow fever epidemics before 1900 as an instrument for

average protection against expropriation. See Appendix Table Al for more detailed variable definitions and sources.

institutions being the major determinanto f in- temperature,a nd distance from the coast as in-

come per capita differences, with little effect strumentsi n addition to our instrument,s ettler

from geography/healthv ariables. mortality. McArthur and Sachs (2001) report

Columns (7)-(9) report estimates from mod- that in these regressions the institutionv ariable

els that treat both health and institutions as is still significant,b ut geography/healtha re also

endogenous, and following McArthur and significant. In contrastt o McArthura nd Sachs'

Sachs, instrumentf or them using latitude,m ean results, we find that only institutionsa re signif-

VOL. 91 NO. 5 ACEMOGLUE T AL.: THE COLONIALO RIGINSO F DEVELOPMENT 1393

icant. This difference is due to the fact that B. OveridentificationT ests

McArthura nd Sachs include Britaina nd France

in their sample. Britain and France are not in We can also investigate the validity of our

our sample, which consists of only ex-colonies approachb y using overidentificationt ests. Ac-

(there is no reason for variationi n the mortality cording to our theory, settler mortality (M) af-

rates of British and Frencht roops at home to be fected settlements (S); settlements affected

related to their institutional development). It early institutions (C); and early institutions af-

turns out that once Britain and France are left fected current institutions (R)-cf., equations

out, the McArthura nd Sachs' specificationg en- (2), (3), and (4). We can test whether any of

erates no evidence that geography/healthv ari- these variables, C, S, and M, has a direct effect

ables have an important effect on economic on income per capita, log y, by using measures

performance.29 of C and S as additionali nstruments.T he overi-

As a final strategyt o see whethers ettlerm or- dentification test presumes that one of these

tality could be proxying for the currentd isease instruments,s ay S, is truly exogenous, and tests

environment, we estimated models using a for the exogeneity of the others, such as settler

yellow fever instrument.T his is a dummy van- mortality. This approachi s useful since it is a

able indicating whether the area was ever af- directt est of our exclusion restriction.H owever,

fected by yellow fever (from Oldstone, 1998; such tests may not lead to a rejection if all

see Appendix Table Al). This is an attractive instruments are invalid, but still highly corre-

alternative strategy because yellow fever is lated with each other. Therefore, the results

mostly eradicatedt oday, so this dummy should have to be interpretedw ith caution.

not be correlatedw ith the currentd isease envi- Overall, the overidentificationt est will reject

ronment. The disadvantageo f this approachi s the validity of our approach if either (i) the

that therei s less variationi n this instrumentt han equation of interest, (1), does not have a con-

our settler mortality variable. Despite this, the stant coefficient, i.e., log yi = jt + aiRi + si,

yellow fever results, reported in columns (10) where i denotes country, or (ii) C or S has a

and (11) of Table 7, are encouraging.T he esti- direct effect on income per capita, log yi (i.e.,

mate in our base sample is 0.91 (s.e. = 0.24) either S or C is correlated with si), or (iii)

comparable to our baseline estimate of 0.95 settler mortality,M , has an effect on log yi that

reportedi n Table 4. Adding continentd ummies works througha notherv ariable,s uch as culture.

in column (11) reduces this estimate slightly to The data supportt he overidentifyingr estric-

0.90 (s.e. = 0.32).3 tions implied by our approach.31 This implies

that, subject to the usual problems of power

associated with overidentificationt ests, we can

rule out all three of the above possibilities. This

29 McArthura nd Sachs (2001) also reports pecifications

gives us additionalc onfidence that settler mor-

with more instruments.H owever, using six or seven instru-

ments with only 64 observations leads to the "too-many- tality is a valid instrument and that we are

instruments"p roblem, typically biasing the IV estimate estimating the effect of institutions on current

towardst he OLS estimate (see John Bound et al., 1995). We performance with our instrumental-variable

therefored id not pursue these estimates further.

strategy( i.e., not capturingt he effect of omitted

Finally, McArthur and Sachs also argue that our ex-

variables).

colonies sample may not have enough geographicv ariation.

In their view, this may be why we do not find a role for

geographicv ariables.N onetheless, there is substantialv ari-

ation in the geography variables in our sample which in-

cludes countries such as Canada, the United States, New 31 In some specifications, the overidentificationt ests us-

Zealand, and Australia.T he standardd eviation of distance ing measures of early institutions reject at that 10-percent

from the equator in the world is 1.89, greater than 1.33 in level (but not at the 5-percentl evel). There are in fact good

our sample. This is mainly because there are a large number reasons to expect institutions circa 1900 to have a direct

of European countries with high latitudes in the world effect on income today (and hence the overidentifyingt ests

sample, but not in our sample. to reject our restrictions): these institutions should affect

30 If we drop the Neo-Europes (not reportedh ere), the physical and humanc apital investments at the beginning of

estimate is still similar and highly significant, 1.05 (s.e. = the century, and have some effect on currenti ncome levels

0.35). throught his channel.

1394 THEA MERICANE CONOMICR EVIEW DECEMBER2 001

TABLE8 -OVERIDENTIFICATIOTNE STS

Base Base Base Base Base Base Base Base Base Base

sample sample sample sample sample sample sample sample sample sample

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Panel A: Two-Stage Least Squares

Average protectiona gainst expropriation 0.87 0.92 0.71 0.68 0.72 0.69 0.60 0.61 0.55 0.56

risk, 1985-1995 (0.14) (0.20) (0.15) (0.20) (0.14) (0.19) (0.14) (0.17) (0.12) (0.14)

Latitude -0.47 -0.34 0.31 -0.41 -0.16

(1.20) (1.10) (1.05) (0.92) (0.81)

Panel B: First Stage for Average ProtectionA gainst ExpropriationR isk

Europeans ettlementsi n 1900 3.20 2.90

(0.62) (0.83)

Constrainto n executive in 1900 0.32 0.26

(0.08) (0.09)

Democracy in 1900 0.24 0.20

(0.06) (0.07)

Constrainto n executive in first year of 0.25 0.22

independence (0.08) (0.08)

Democracy in first year of independence 0.19 0.17

(0.05) (0.05)

R2 0.30 0.30 0.20 0.24 0.24 0.26 0.19 0.25 0.26 0.30

Panel C: Results from OveridentificationT est

p-value (from chi-squaredt est) [0.67] [0.96] [0.09] [0.20] [0.11] [0.28] [0.67] [0.79] [0.22] [0.26]

Panel D: Second Stage with Log Mortalitya s Exogenous Variable

Average protection against expropriation 0.81 0.88 0.45 0.42 0.52 0.48 0.49 0.49 0.4 0.41

risk, 1985-1995 (0.23) (0.30) (0.25) (0.30) (0.23) (0.28) (0.23) (0.25) (0.18) (0.19)

Log Europeans ettler mortality -0.07 -0.05 -0.25 -0.26 -0.21 -0.22 -0.14 -0.14 -0.19 -0.19

(0.17) (0.18) (0.16) (0.17) (0.15) (0.16) (0.16) (0.15) (0.13) (0.12)

Latitude -0.52 0.38 0.28 -0.38 -0.17

(1.15) (0.89) (0.86) (0.84) (0.73)

Notes:P anel A reportst he two-stage least-squarese stimates with log GDP per capita (PPP basis) in 1995 as the dependentv ariable,a nd Panel

B reportst he correspondingf irst stage (latitude is included in even-numberedc olumns but is never significant and not reportedh ere to save

space). Panel C reports the p-value for the null hypothesis that the coefficient on average protection against expropriationr isk in the

second-stage regression (i.e., Panel A) is the same as when instrumentedu sing log mortalityo f settlers in additiont o the indicatedi nstruments.

Panel D reportsr esults from the regressioni n which log mortalityi s included as an exogenous variablea nd currenti nstitutionsa re instrumented

using the alternativei nstrumenti ndicated. Standarde rrors are in parentheses.A ll regressions with constrainto n executive and democracy in

first year of independence also include years since independence as a regressor. All regressions have 60 observations, except those with

democracy in 1900 which have 59 observationsa nd those with Europeans ettlements in 1900 which have 63 observations.

The results of the overidentification tests, add latitude, and use other instruments such

and related results, are reported in Table 8. In as constraint on the executive in 1900 and in

the top panel, Panel A, we report the 2SLS the first year of independence, and democracy

estimates of the effect of protection against in 1900.

expropriation on GDP per capita using a va- Panel D reports an easy-to-interpret version

riety of instruments other than mortality rates, of the overidentification test. It adds the log of

while Panel B gives the corresponding first mortality as an exogenous regressor. If mor-

stages. These estimates are always quite close tality rates faced by settlers had a direct effect

to those reported in Table 4. For example, in on income per capita, we would expect this

column (1), we use European settlements in variable to come in negative and significant.

1900 as the only instrument for institutions. In all cases, it is small and statistically insig-

This results in an estimated effect of 0.87 nificant. For example, in column (1), log mor-

(with standarde rror 0.14), as compared to our tality has a coefficient of -0.07 (with

baseline estimate of 0.94. The other columns standard error 0.17). This confirms that the

VOL.9 1 NO. 5 ACEMOGLUE T AL.: THE COLONIALO RIGINSO F DEVELOPMENT 1395

impact of mortality rates faced by settlers not go and settle, and they were more likely to

likely works through their effect on set up extractive states. (3) Finally, we argue

institutions. that these early institutions persisted to the

Finally, for completeness, in Panel C we re- present. Determinants of whether Europeans

port the p-value from the appropriatex 2 overi- could go and settle in the colonies, therefore,

dentificationt est. This tests whether the 2SLS have an importante ffect on institutions today.

coefficients estimated with the instrumentsi n- We exploit these differences as a source of

dicated in Panels A and B versus the coeffi- exogenous variation to estimate the impact of

cients estimated using (log) settler mortalityi n institutions on economic performance.

addition to the "true"i nstruments are signifi- There is a high correlationb etween mortality

cantly different (e.g., in the first column, the rates faced by soldiers, bishops, and sailors in

coefficient using Europeans ettlements alone is the colonies and Europeans ettlements;b etween

compared to the estimate using European set- Europeans ettlements and early measures of in-

tlements and log mortality as instruments).W e stitutions; and between early institutions and

never reject the hypothesis that they are equal at institutions today. We estimate large effects of

the 5-percents ignificance level. So these results institutions on income per capita using this

also show no evidence that mortalityr ates faced source of variation.W e also documentt hat this

by settlers have a direct effect- or an effect relationship is not driven by outliers, and is

working through a variable other than institu- robust to controlling for latitude, climate, cur-

tions- on income per capita. rent disease environment, religion, natural

resources, soil quality, ethnolinguisticf ragmen-

VI. ConcludingR emarks tation, and currentr acial composition.

It is useful to point out that our findings do

Many economists and social scientists be- not imply that institutions today are predeter-

lieve that differences in institutions and state mined by colonial policies and cannot be

policies are at the root of large differences in changed. We emphasize colonial experience as

income per capita across countries. There is one of the many factors affecting institutions.

little agreement, however, about what deter- Since mortalityr ates faced by settlers are argu-

mines institutions and governmenta ttitudest o- ably exogenous, they are useful as an instru-

wards economic progress, making it difficult to ment to isolate the effect of institutions on

isolate exogenous sources of variationi n insti- performance.I n fact, our reading is that these

tutions to estimate their effect on performance. results suggest substantiale conomic gains from

In this paper we argued that differences in co- improving institutions, for example as in the

lonial experience could be a source of exoge- case of Japan during the Meiji Restoration or

nous differences in institutions. South Korea during the 1960's.

Our argument rests on the following pre- There are many questions that our analysis

mises: (1) Europeansa doptedv ery differentc ol- does not address.I nstitutionsa re treatedl argely

onization strategies, with different associated as a "black box": The results indicate that re-

institutions.I n one extreme, as in the case of the ducing expropriationr isk (or improving other

United States, Australia,a nd New Zealand,t hey aspects of the "cluster of institutions")w ould

went and settled in the colonies and set up result in significant gains in income per capita,

institutions that enforced the rule of law and but do not point out what concrete steps would

encouragedi nvestment.I n the other extreme, as lead to an improvement in these institutions.

in the Congo or the Gold Coast, they set up Institutionalf eatures,s uch as expropriationr isk,

extractive states with the intention of transfer- property rights enforcement, or rule of law,

ring resources rapidly to the metropole. These should probably be interpreteda s an equilib-

institutions were detrimentalt o investment and rium outcome, related to some more funda-

economic progress. (2) The colonization strat- mental "institutions,"e .g., presidential versus

egy was in part determinedb y the feasibility of parliamentarys ystem, which can be changed

European settlement. In places where Europe- directly. A more detailed analysis of the effect

ans faced very high mortalityr ates, they could of more fundamental institutions on property

1396 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

rights and expropriationr isk is an important residualf rom the auxiliarye quation,R i = Ko +

area for future study. KZi + Ri, and so K = cov(zi, Ri)/var(zi) <

0, which is negative due to the fact that cov(Ri,

APPENDIXA : BIAS IN THEE FFECTO F Zi) < 0. The reduced form for zi is:

INSTITUTIOWNSH ENO THERE NDOGENOUS

VARIABLEASR E INCLUDED 1

(Al) zi - +

To simplify notation, suppose that Ri is ex-

ogenous, and another variable that is endoge- + 4iaRi + (psi + ij).

nous, zi, such as prevalence of malaria or

ethnolinguistic fragmentation,i s added to the We impose the regularityc ondition 4 - i < 1,

regression. Then, the simultaneous equations so that an increase in the disturbance to the

model becomes z-equation, m1ia,c tually increases zi. Now using

this reduced form, we can write

Y i-ko + aRi + 'zi + ?i

Zi= 1 + Yi + qi, (A2) plim a^= a - K C v (Zi )

va(ff? if)

+ 4o)02

where Yi = log yi. We presumet hat a > 0, 4 < =~ 0E~ - K@- ~(,7

0, and 7n< 0, which implies that we interpretz 1 (1 - 07T) * var(Ri)

as a negative influence on income. Moreover,

this naturallyi mplies that cov(rji, 8j) < 0 and where oi is the variance of s, and u,, is the

cov(zi, Ri) < 0, that is, the factor za is likely to covariance of s and -q.

be negatively correlated with positive influ- Substitutingf or K in (A2), we obtain:

ences on income.

plim &

Standarda rgumentsi mply that

+

(of? efo?) cov(zi, Ri)

-

cov(Rf, Si) (1 4)7 ) *v ar(Ri) var(z,)

plim == a+ + var(i)

Recall that 4 < 0, o < 0, and cov(zi, Ri) <

cov(zi, E,)

{- 0. Therefore,p lim a^< a, and when we control

a Kva var(R;) e for the endogenous variable zi, the coefficient

on our institution variable will be biased

where K and Ri are the coefficient and the downwards.

VOL. 91 NO. 5 ACEMOGLUE T AL.. THE COLONIALO RIGINSO F DEVELOPMENT 1397

APPENDIXT ABLE Al: DATA DESCRIPTIONAS ND SOURCES

Log GDP per capita, 1975 and 1995: PurchasingP ower Parity Basis, from World Bank, World Development Indicators,

CD-Rom, 1999.

Log output per worker, 1988: As used in Hall and Jones (1999), from www.stanford.edu/-chadj.

Average protection against expropriation risk, 1985-1995: Risk of expropriationo f private foreign investment by

government,f rom 0 to 10, where a higher score means less risk. Mean value for all years from 1985 to 1995. This data

was previously used by Knack and Keefer (1995) and was organized in electronic form by the IRIS Center (University of

Maryland);o riginally Political Risk Services.

Constraint on executive in 1900, 1970, 1990 and in first year of independence: Seven-categorys cale, fiom 1 to 7, with a

higher score indicatingm ore constraintsS. core of 1 indicatesu nlimiteda uthoritys; core of 3 indicatess light to moderate

limitations;s core of 5 indicatess ubstantialli mitations;s core of 7 indicatese xecutive parityo r subordinationE. qualt o 1 if

countryw as not independenta t that date. Date of independencei s the firsty ear that the countrya ppearsi n the Polity HI data

set. Fromt he Polity HI data set, downloadedf rom Inter-UniversitCy onsortiumf or Political and Social Research.S ee Gun

(1997).

Democracy in 1900 and first year of independence: An 1 1-category scale, from 0 to 10, with a higher score indicating

more democracy. Points from three dimensions: Competitivenesso f Political Participation( from 1 to 3); Competitiveness

of Executive Recruitment( from 1 to 2, with a bonus of 1 point if there is an election); and Constraintso n Chief

Executive (from 1 to 4). Equal to 1 if country not independenta t that date. From the Polity III data set. See Gurr( 1997).

Europeans ettlements in 1900 and percent of Europeand escent 1975: Percent of populationE uropeano r of European

descent in 1900 and 1975. From McEvedy and Jones (1975) and other sources listed in Appendix Table A6 (available

from the authors).

Ethnolinguistic fragmentation: Average of five different indices of ethnolinguisticf ragmentation.E asterly and Levine

(1997), as used in La Porta et al. (1999).

Religion variables: Percent of populationt hat belonged to the three most widely spread religions of the world in 1980

(or for 1990-1995 for countries formed more recently). The four classifications are: Roman Catholic, Protestant,M uslim,

and "other."F rom La Porta et al. (1999).

French legal origin dummy: Legal origin of the company law or commercial code of each country. Our base sample is

all French CommercialC ode or English Common Law Origin. From La Porta et al. (1999).

Colonial dummies: Dummy indicating whether country was a British, French, German, Spanish, Italian, Belgian, Dutch,

or Portuguesec olony. From La Porta et al. (1999).

Temperature variables: Average temperature,m inimum monthly high, maximum monthly high, minimum monthly low,

and maximum monthly low, all in centigrade.F rom Parker( 1997).

Mean temperature: 1987 mean annual temperaturei n degrees Celsius. From McArthura nd Sachs (2001).

Humidity variables: Morning minimum, morning maximum, afternoonm inimum, and afternoonm aximum, all in

percent. From Parker( 1997).

Soil quality: Dummies for steppe (low latitude), desert (low latitude), steppe (middle latitude), desert (middle latitude),

dry steppe wasteland, desert dry winter, and highland. From Parker( 1997).

Natural resources: Percent of world gold reserves today, percent of world iron reserves today, percent of world zinc

reserves today, numbero f minerals present in country, and oil resources (thousandso f barrels per capita.) From Parker

(1997).

Dummy for landlocked: Equal to 1 if country does not adjoin the sea. From Parker( 1997).

Malaria in 1994: Populationl iving where falciporum malariai s endemic (percent). Gallup and Sachs (1998).

Latitude: Absolute value of the latitude of the country (i.e., a measure of distance from the equator), scaled to take

values between 0 and 1, where 0 is the equator.F rom La Porta et al. (1999).

Log European settler mortality: See Appendix Table A2, reproducedb elow, and Appendix B (available from the

authors).

Yellow fever: Dummy equal to 1 if yellow fever epidemics before 1900 and 0 otherwise. Oldstone (1998 p. 69) shows

currenth abitato f the mosquito vector; these countries are coded equal to 1. In addition, countries in which there were

epidemics in the nineteenthc entury, according to Curtin (1989, 1998) are also coded equal to 1.

Infant mortality: Infant mortalityr ate (deaths per 1,000 live births). From McArthura nd Sachs (2001).

Life expectancy: Life expectancy at birth in 1995. From McArthura nd Sachs (2001).

Distance from the coast: Proportiono f land area within 100 km of the seacoast. From McArthura nd Sachs (2001).

1398 THE AMERICANE CONOMICR EVIEW DECEMBER2 001

APPENDIXT ABLEA 2-DATA ON MORTALITY

Average Average

protection protection

Log GDP against Log GDP against

Abbreviated per capita expropriation Main Abbreviated per capita expropriation Main

name used (PPP) in risk mortality name used (PPP) in risk mortality

Formerc olonies in graphs 1995 1985-1995 estimate Former colonies in graphs 1995 1985-1995 estimate

Algeria DZA 8.39 6.50 78.2 Jamaica JAM 8.19 7.09 130

Angola AGO 7.77 5.36 280 Kenya KEN 7.06 6.05 145

Argentina ARG 9.13 6.39 68.9 Madagascar MDG 6.84 4.45 536.04

Australia AUS 9.90 9.32 8.55 Malaysia MYS 8.89 7.95 17.7

Bahamas BHS 9.29 7.50 85 Mali MLI 6.57 4.00 2940

Bangladesh BGD 6.88 5.14 71.41 Malta MLT 9.43 7.23 16.3

Bolivia BOL 7.93 5.64 71 Mexico MEX 8.94 7.50 71

Brazil BRA 8.73 7.91 71 Morocco MAR 8.04 7.09 78.2

BurkinaF aso BFA 6.85 4.45 280 New Zealand NZL 9.76 9.73 8.55

Cameroon CMR 7.50 6.45 280 Nicaragua NIC 7.54 5.23 163.3

Canada CAN 9.99 9.73 16.1 Niger NER 6.73 5.00 400

Chile CHL 9.34 7.82 68.9 Nigeria NGA 6.81 5.55 2004

Colombia COL 8.81 7.32 71 Pakistan PAK 7.35 6.05 36.99

Congo (Brazzaville) COG 7.42 4.68 240 Panama PAN 8.84 5.91 163.3

Costa Rica CRI 8.79 7.05 78.1 Paraguay PRY 8.21 6.95 78.1

C6te d'Ivoire CIV 7.44 7.00 668 Peru PER 8.40 5.77 71

DominicanR epublic DOM 8.36 6.18 130 Senegal SEN 7.40 6.00 164.66

Ecuador ECU 8.47 6.55 71 Sierra Leone SLE 6.25 5.82 483

Egypt EGY 7.95 6.77 67.8 Singapore SGP 10.15 9.32 17.7

El Salvador SLV 7.95 5.00 78.1 South Africa ZAF 8.89 6.86 15.5

Ethiopia ETH 6.11 5.73 26 Sri Lanka LKA 7.73 6.05 69.8

Gabon GAB 8.90 7.82 280 Sudan SDN 7.31 4.00 88.2

Gambia GMB 7.27 8.27 1470 Tanzania TZA 6.25 6.64 145

Ghana GHA 7.37 6.27 668 Togo TGO 7.22 6.91 668

Guatemala GTM 8.29 5.14 71 Trinidada nd Tobago TTO 8.77 7.45 85

Guinea GIN 7.49 6.55 483 Tunisia TUN 8.48 6.45 63

Guyana GUY 7.90 5.89 32.18 Uganda UGA 6.97 4.45 280

Haiti HTI 7.15 3.73 130 Uruguay URY 9.03 7.00 71

Honduras HND 7.69 5.32 78.1 USA USA 10.22 10.00 15

Hong Kong HKG 10.05 8.14 14.9 Venezuela VEN 9.07 7.14 78.1

India IND 7.33 8.27 48.63 Vietnam VNM 7.28 6.41 140

Indonesia IDN 8.07 7.59 170 Zaire ZAR 6.87 3.50 240

REFERENCES of Talent: A General Equilibrium Ap-

proach."E conomicJ ournal, September1 998,

Acemoglu,D aron. "Reward Structuresa nd the 108(450), pp. 1381-403.

Allocation of Talent." European Economic Altonji,J oseph;E lder, Todd and Taber, Christo-

Review, January1 995, 39(1), pp. 17-33. pher. "Selectiono n Observeda nd Unobserved

Acemoglu,D aron;J ohnson,S imona nd Robinson, Variables:A ssessing the Effectivenesso f Cath-

James A. "The Colonial Origins of Compar- olic Schools." Mimeo, NorthwesternU niver-

ative Development: An Empirical Investiga- sity, 2000.

tion." National Bureau of Economic Anderson, Benedict. Imagined communities.

Research (Cambridge,M A) Working Paper London: Verso, 1983.

No. 7771, June 2000. Bates, Robert H. Essays on the political econ-

. "Reversal of Fortune: Geography and omy of rural Africa. Cambridge:C ambridge

Institutions in the Making of the Modem University Press, 1983.

World Income Distribution." National Bu- Bertocchi, Graziella and Canova, Fabio. "Did

reau of Economic Research (Cambridge, Colonization Matter for Growth? An Em-

MA) Working Paper No. 8460, April 2001. pirical Exploration into the Historical

Acemoglu,D arona nd Verdier,T hierry." Proper- Causes of Africa' s Underdevelopment."

ty Rights, Corruption and the Allocation Centre for Economic Policy Research

VOL.9 1 NO. 5 ACEMOGLUE T AL: THE COLONIALO RIGINSO F DEVELOPMENT 1399

Discussion Paper No. 1444, September New York: Cambridge University Press,

1996. 1986.

Besley, Timothy. "PropertyR ights and Invest- Crowder,M ichael. West Africa under colonial

ment Incentives: Theory and Evidence from rule. Chicago: Northwestern University

Ghana."J ournal of Political Economy, Octo- Press, 1968.

ber 1995, 103(5), pp. 903-37. Curtin,P hilip D. The image of Africa. Madison,

Bloom, David E. and Sachs, Jeffrey D. "Geogra- WI: University of Wisconsin Press, 1964.

phy, Demography,a nd Economic Growth in . "Epidemiology and the Slave Trade."

Africa."B rookings Papers on Economic Ac- Political Science Quarterly, June 1968,

tivity, 1998, (2), pp. 207-73. 83(2), pp. 181-216.

Boone, Catherine. Merchant capital and the . Death by migration:E urope's encoun-

roots of state power in Senegal, 1930-1985. ter with the tropical world in the 19th Cen-

New York: Cambridge University Press, tury. New York: Cambridge University

1992. Press, 1989.

Bound,J ohn;J aeger,D avidA . and Baker,R egina . Disease and empire: The health of

M. "Problems with InstrumentalV ariables European troops in the conquest of Africa.

EstimationW hen the Correlationb etween the New York: Cambridge University Press,

Instrumentsa nd the EndogenousE xplanatory 1998.

Variable Is Weak." Journal of the American Curtin, Philip D.; Feierman,S teven; Thompson,

Statistical Association, June 1995, 90(430), Leonard and Vansina, Jan. African history:

pp. 443-50. From earliest times to independence,2 nd Ed.

Bruce-Chwatt, Leonard J. Essential malariology. London: Longman, 1995.

London:W iley Medical Publications,1 980. Davis,L anceE . and HuttenbackR, obertA . Mam-

Cain, Philip J. and Hopkins,A nthonyG . British mon and the pursuit of empire: The political

imperialism: Innovation and expansion economy of British imperialism,1 860-1912.

1688-1914. New York: Longman, 1993. CambridgeC: ambridgeU niversityP ress, 1987.

Callaghy,T homasM . The state-society struggle: Denoon,D onald.S ettler capitalism: The dynam-

Zaire in comparativep erspective. New York: ics of dependentd evelopmenti n the southern

Columbia University Press, 1984. hemisphere. Oxford: ClarendonP ress, 1983.

Coatsworth,J ohn H. "Obstacles to Economic Diamond,J ared M. Guns, germs and steel: The

Growth in 19th-CenturyM exico." American fate of human societies. New York: W.W.

Historical Review, February1 978, 83(1), pp. Norton & Co., 1997.

80-100. Dunn, RichardS . Sugar and slaves: The rise of

... "The Limits of Colonial Absolutism: the planter class in the English West Indies

Mexico in the EighteenthC entury,"i n Karen 1624-1713. Chapel Hill, NC: University of

Spalding, ed., Essays in the political, eco- North CarolinaP ress, 1972.

nomic and social history of Latin America. Easterly, William and Levine, Ross. "Africa's

Newark, DE: University of Delaware Press, Growth Tragedy: Policies and Ethnic Divi-

1982, pp. 25-51. sions." QuarterlyJ ournal of Economics, No-

... "Economic and InstitutionalT rajecto- vember 1997, 112(4), pp. 1203-50.

ries in 19th CenturyL atin America,"i n John Eltis, David. The rise of African slavery in the

H. Coatsworth and Alan M. Taylor, eds., Americas. Cambridge:C ambridgeU niversity

Latin America and the world economy since Press, 2000.

1800. Cambridge, MA: Harvard University Engerman, Stanley L.; Mariscal, Elisa and

Press, 1999, pp. 23-54. Sokoloff, Kenneth L. "Schooling, Suffrage,

Coplin, William D.; O'Leary, Michael K. and and the Persistenceo f Inequalityi n the Amer-

Sealy, Tom. A business guide to political risk icas, 1800-1945." Unpublished manuscript,

for international decisions, 2nd Ed. New UCLA, 1998.

York: Political Risk Services, 1991. Engerman,S tanley L. and Sokoloff,K enneth L.

Crosby, Alfred. Ecological imperialism:T he bi- "Factor Endowments, Institutions, and Dif-

ological expansion of Europe 900-1900. ferentialP aths of Growth among New World

1400 THEA MERICANE CONOMICR EVIEW DECEMBER2 001

Economies," in Stephen Haber, ed., How Johnson, Simon; McMillan, John and Woodruff,

Latin America fell behind. Stanford, CA: Christopher. "PropertyR ights and Finance."

StanfordU niversityP ress, 1997, pp. 260-304. Unpublished working paper, Massachusetts

Galenson, David W. "The Settlement and Institute of Technology and University of

Growth of the Colonies: Population, Labor California,S an Diego, 1999.

and Economic Development," in Stanley L. Jones, Eric L. The European iniracle: Environ-

Engermana nd Robert E. Gallman, eds., The ments, economies and geopolitics in the his-

Cambridge economic history of the United tory of Europe and Asia. Cambridge:

States, volumeI , the colonial era. New York: CambridgeU niversity Press, 1981.

CambridgeU niversity Press, 1996, pp. 135- Knack, Stephen and Keefer, Philip. "Institutions

208. and Economic Performance:C ross-Country

Gallup, John L.; Mellinger, Andrew D. and Sachs, Tests Using AlternativeM easures."E conom-

Jeffrey D. "Geographya nd Economic Devel- ics and Politics, November 1995, 7(3), pp.

opment." National Bureau of Economic Re- 207-27.

search (Cambridge,M A) WorkingP aperN o. Landes, David S. The wealth and poverty of

6849, 1998. nations: Why some are so rich and some so

Gallup, John L. and Sachs, Jeffrey D. "The Eco- poor. New York: W.W. Norton & Co., 1998.

nomic Burden of Malaria." Unpublished Lang, James. Conquest and commerce: Spain

manuscript,H arvardC enter for International and England in the Americas. New York:

Development, October 1998. Academic Press, 1975.

Gann, Lewis H. and Duignan, Peter. White set- La Porta, Rafael; Lopez-de-Silanes, Florencio;

tlers in tropical Africa. Baltimore,M D: Pen- Shleifer, Andrei and Vishny, Robert W. "Law

guin, 1962. and Finance."J ournal of Political Economy,

. The rulers of Belgian Africa. Prince- December 1998, 106(6), pp. 1113-55.

ton, NJ: Princeton University Press, 1979. . "The Quality of Government." Journal

Gilles, Herbert M. and Warrell, David A. Bruce- of Law, Economics, and Organization,A pril

Chwatt's essential malariology, 3rd Ed. Lon- 1999, 15(1), pp. 222-79.

don: Arnold, 1993. Lipset, Seymour M. "The Social Requisites of

Grier, Robin M. "Colonial Legacies and Eco- Democracy Revisited." American Sociologi-

nomic Growth."P ublic Choice, March 1999, cal Review, February1 994, 59(1), pp. 1-22.

98(3-4), pp. 317-35. Lockhart, James and Schwartz, Stuart B. Early

Gurr,T ed Robert." PolityI I: Political Structures Latin America. New York: Cambridge Uni-

and Regime Change, 1800-1986." Unpub- versity Press, 1983.

lished manuscript, University of Colorado, Lynch, John. The SpanishA mericanr evolutions,

Boulder, 1997. 1808-1826. New York: W.W. Norton & Co.,

Gutierrez, Hector. "La Mortalite des Eveques 1986.

Latino-Americains aux XVIIe et XVIII Manning, Patrick. Slavery,c olonialism, and eco-

Siecles." Annales de Demographie Histo- nomic growth in Dahomey, 1640-1980. New

rique, 1986, pp. 29-39. York: CambridgeU niversityP ress, 1982.

Hall, Robert E. and Jones, Charles I. "Why Do . Francophone Sub-Saharan Africa,

Some CountriesP roduceS o Much More Out- 1880-1995. New York: CambridgeU niver-

put Per Worker Than Others?" Quarterly sity Press, 1988.

Journal of Economics, February 1999, Mauro, Paulo. "Corruption and Growth."Q uar-

114(1), pp. 83-116. terly Journal of Economics, August 1995,

Hughes, Robert. Thef atal shore. London: Col- 110(3), pp. 681-712.

lins Harvill, 1987. Mazingo, Christopher. "Effects of Property

Jewsiewicki, Bogumil. "Rural Society and the Rights on Economic Activity: Lessons from

Belgian Colonial Economy," in D. Bir- the Stolypin Land Reform." Unpublished

mingham and P. M. Martin, eds., The his- manuscript,M assachusettsI nstituteo f Tech-

tory of Central Africa, volume 11. New nology, 1999.

York: Longman, 1983, pp. 95-125. McArthur, John W. and Sachs, Jeffrey D. "Institu-

VOL.9 1 NO. 5 ACEMOGLUE T AL: THE COLONIALO RIGINSO F DEVELOPMENT 1401

tions and Geography:C ommento n Acemoglu, Vol. 4. Westport, CT: Greenwood Press,

Johnson and Robinson (2000)." National Bu- 1997.

reau of EconomicR esearch( CambridgeM, A) Peemans,J ean-Philippe". CapitalA ccumulation

WorkingP aperN o. 8114, February2 001. in the Congo under Colonialism: The

McCullough, David. The path between the Role of the State," in Lewis H. Gann and

seas: The creation of the Panama Canal Peter Duignan, eds., Colonialism in Africa

1870-1914. New York: Simon and Schus- 1870-1960, volume 4, the economics of

ter, 1977. colonialism. Stanford,CA: Hoover Institu-

McEvedy, Colin and Jones, Richard. Atlas of tion Press, 1975, 165-212.

world population history. New York: Facts Porter, Roy, ed. The Cambridgei llustrated his-

on File, 1975. tory of medicine. Cambridge: Cambridge

McNeill,W illiamH . Plagues and peoples. New University Press, 1996.

York: Anchor Books, 1976. Reno, William. Corruptiona nd state politics in

MontesquieuC, harlesd e Secondat.T he spirit of Sierra Leone. New York: CambridgeU niver-

the laws. New York: Cambridge University sity Press, 1995.

Press, [1748] 1989. Roberts, Andrew. A history of Zambia. London:

Najera,J ose A. and Hempel,J oahim. "The Bur- Heinemann, 1976.

den of Malaria."1 996, downloaded from the Robinson, Ronald E. and Gallagher, John. Africa

World Health Organization'sR oll Back Ma- and the Victorians: The official mind of im-

laria website, http://mosquito.who.int/docs/b. perialism. London: MacMillan, 1961.

North,D ouglassC . Structurea nd change in eco- Rodrik, Dani. "WhereD id All the GrowthG o?"

nomic history. New York: W.W. Norton & Journal of Economic Growth, December

Co., 1981. 1999, 4(4), pp. 385-412.

North, Douglass C.; Summerhill, William and Turner, Thomas and Young, Crawford. The rise

Weingast,B arry. "Order,D isorder and Eco- and decline of the Zairian state. Madison,

nomic Change: Latin America vs. North WI: University of Wisconsin Press, 1985.

America." Unpublished manuscript,H oover von Hayek, Frederich A. Thec onstitutionof lib-

Institution,S tanfordU niversity, 1998. erty. Chicago: University of Chicago Press,

North, DouglassC . and Thomas,R obert P. The 1960.

rise of the western world: A new economic Weber, Eugen J. Peasants into Frenchmen.

history. Cambridge: Cambridge University Stanford, CA: Stanford University Press,

Press, 1973. 1976.

Oldstone,M ichael B. A. Viruses, plagues, and Wittfogel, Karl A. Orientald espotismA: com-

history. New York: Oxford University Press, parative study of total power. New Haven,

1998. CT: Yale University Press, 1957.

Parker, Philip M. National cultures of the Young, Crawford. The African colonial state in

world: A statistical reference, Cross-Cul- comparative perspective. New Haven, CT:

tural Statistical Encyclopedia of the World, Yale University Press, 1994.