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Unformatted text preview: st Risk of Expropriation, 1985-95 10 Political institutions and economic
CHL SGP Log GDP per capita, PPP, in 1995 10 FRA ARG
VEN SLV MUS
BOL GMB IND MEX
SYR 8 IDN GIN
NGA CIV GHA
MAR CMR PER EGY
CAF GTM LKA
PRY ZMB BEN
MDG YEM BDI
RWA MOZ MWI
0 2 4
Constraint on Executive in 1990s 6 8 Causal Inference In social science we want to make causal statements such as – if
countries adopt “better institutions” they will become richer.
This is obviously di¢ cult to do by looking at these scatterplots or
even their multivariate generalization (Ordinary Least Squares).
The critical issue is the identi…cation of causal e¤ects.
Why is this so di¢ cult? James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis
September 9, 2009
5 / 24 Institutions are Endogenous
Institutions could vary because underlying factors di¤er across
Geography, ecology, climate?
Perhaps other factors?
Montesquieu’ story: Geography determines “human attitudes”,
Human attitudes determine both economic performance and the
political system. Institutions potentially in‡uenced by the
determinants of income.
We can learn only a limited amount from correlations and ordinary
least square (OLS) regressions. James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis
September 9, 2009
6 / 24 Geography hypothesis: Montesquieu Montesquieu:
“The heat of the climate can be so excessive that the body there will be
absolutely without strength. So, prostration will pass even to the spirit; no
curiosity, no noble enterprise, no generous sentiment; inclinations will all
be passive there; laziness there will be happiness”.
“People are ... more v...
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This document was uploaded on 02/28/2014 for the course ECON 2328 at Harvard.
- Fall '09