The Role of Institutions

Power if you control for the colonial identity it

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Unformatted text preview: der 2$ a day) This undermines the “geography hypothesis” (direct effect of geography on development) What changed? Institutions/social organizations Relatively better institutions emerged in places that were previously poor and sparsely settled Compare the US vs. the Caribbean or peru Thus an INSTITUTIONAL reversal occurred: BASIS FOR COLONIAL ARGUMENT OF DEVELOPMENT Disease burden was so high in some countries that Europeans were dying at an alarming rate when they showed up, so they established Extractive colonies whose job was just to extract resources and export back to Europe Europeans introduced relatively good institutions in sparsely- settled and poor places, and introduced or maintained previously- existing bad institutions in densely- settled and rich areas Institutionalist theory of development: Institutional reversal + persistence ! development path Countries with better institutions prosper while those with bad institutions stagnate or decline Differences are not merely between capitalist and...
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