People are more vigorous in cold climates the

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: igorous in cold climates. The inhabitants of warm countries are, like old men, timorous; the people in cold countries are, like young men, brave”. Moreover, Montesquieu argues that lazy people tend to be governed by despots, while vigorous people could be governed in democracies; thus hot climates are conducive to authoritarianism and despotism. James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis September 9, 2009 7 / 24 Empirical Pitfalls Montesquieu’ story example of omitted variables bias and s identi…cation problem. Other omitted factors— human nature, culture, geography— vary across countries and a¤ect economic performance. They also are correlated with or have a causal e¤ect on institutions. Similar problem a¤ects inferences about geography on income; potentially correlated with omitted variables. Reverse causality: Income a¤ects institutions. Attenuation bias: Measures of institutions very coarse, poorly correspond to conceptual measures, creating “errors in variables” problem. James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis September 9, 2009 8 / 24 Montesquieu’s story? . USA SGP Log GDP per capita, PPP, in 1995 10 8 HKG QAT AUS JPN LUX CHE AUT BEL FRA NLD DNK DEU GBR IRL NOR CAN ISL SWEFIN ITA ESP ISR NZL GRC KORPRT BRB BHS BHR KWT MLT ARG CZE SVN SAU HUN EST MUS SVK CHL MYS MEX URY TTO ZAF POL OMN LBY BLR LTU LVA RUS FJI THAKNA TUR BRA CRI BWA IRNTUN GAB COL VEN BGR ROM PAN DOM HRV KAZ DZA PER LCA PRY GEO GUY NAM SWZ PHL GRD GTM DMA EGY UKR SLV TKM JAM MAR JOR CHN BLZ LKA SYR ECU IDN AZE BTN VCT MDA ARM NICHND BOL LSO IRQ UZB YUG PNG ZWE IND PAK VNM MRT GHA CMRCIV SEN CAF BIH TGO BGD CPV HTI KEN NPL GIN MMR STP UGA TJK GMB SDN MOZ LBR BEN BFA TCD COG NGA MWI NER GNB DJI ZMB YEMMLI MDG AFG AGO RWA TZA COM ARE ZAR BDI ETH SLE SOM 6 0 .2 .4 Latitude .6 .8 Religion as an Omitted Variable In the Protestant Ethic and the Spirit of Capitalism, Max Weber provided an brilliant illustration of omitted variable bias when he noted (1930, p. 11) “Montes...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online