Exogenous variation

settler mortality as an instrumental variable is not

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Unformatted text preview: (if you control for geography then what is the effect of settler mortality Second stage regressions: Take fitted values of expropriation risks to try to estimate GDP/capita in 1995 (DV) As you go away from tropics, log gdp/capita decreases (so countries in tropical areas are poorer) As you increase protection against risk of expropriation, GDP/capita goes up The reduced form: settler mortality and income per capita today Criticisms of Acemoglu: Many institutional measures capture outcomes (expropriation risk) not permanent characteristics Did Europeans bring with them “limited government”? No! Europeans brought themselves not their “institutions” (in many cases they were escaping their old institutions) More likely, what they brought was their human capital, their knowledge, technologies, etc (GLaesser, et al.) Settler mortality as an instrumental variable is not valid Settlement patterns may influence growth through channels other than institut...
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