Lecture 8 - The Emergence of Modern Economic Growth A...

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The Emergence of Modern Economic Growth: A Comparative and Historical Analysis Lecture 8 James A. Robinson Harvard October 5, 2009 James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis October 5, 2009 1 / 25
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Introduction In Lecture 7 I discussed an institutional interpretation of the British industrial revolution. The great divergence was primarily driven by the fact that the technologies and methods of organization that were invented in Britain spread to some parts of the world but not others. The reason for this very is institutional variation. Some parts of the world already had institutions which created the incentive environment to adopt new technologies etc. and even join in the process of innovation. This was true of °settler colonies±like the United States. Other parts of the world had very di/erent institutions, e.g. °colonies of extraction±. A simple regression showing the impact of institutional variation on the dissemination of the British industrial revolution appears in our paper ²Reversal of Fortune.³ James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis October 5, 2009 2 / 25
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The Spread of the British Industrial Revolution In Lecture 7 I discussed an institutional interpretation of the British industrial revolution. The great divergence was primarily driven by the fact that the technologies and methods of organization that were invented in Britain spread to some parts of the world but not others. The reason for this very uneven dissemination is institutions. A simple regression showing this appears in the Acemoglu, Johnson and Robinson (2002) paper ²Reversal of Fortune.³ To do this we estimated a model of the form y it = μ t + d i + π ° X it + φ ° X it ° UKIND t + e it where X it is the measure of institutions in country i at time (constraints on the executive) t and UKIND t is industrial output in the UK at date t . We also use average institutions ¯ X i out of concerns about endogeneity: y it = μ t + d i + φ ° ¯ X i ° UKIND t + e it James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis October 5, 2009 3 / 25
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TABLE IX T HE I NTERACTION OF U. K. I NDUSTRIALIZATION AND I NSTITUTIONS Former colonies, using only pre-1950 data (1) Former colonies, using data through 1980 (all data) (2) Former colonies, using only pre-1950 data (3) Former colonies, using only data pre-1950 and for independent countries (4) Former colonies, with average institutions for each country, using only pre-1950 data (5) Former colonies, with average institutions for each country, using only pre-1590 data (6) Former colonies, with average institutions for each country, instrumenting using settler mortality, only pre-1950 data (7) Former colonies, with average institutions for each country, instrumenting using settler mortality, only pre-1950 data (8) Former colonies, with average institutions for each country, instrumenting using settler mortality, only pre-1950 data (9) Former colonies, with average institutions for each
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