The Colonial Origins of Comparative Development: An Empirical Investigation By DARON ACEMOGLU,SIMON JOHNSON,AND JAMES A.ROBINSON* We exploit differences in European mortaliry rates to estimate the effect of institu- tions on economic performance.Europeans adopted very different colonization policies in different colonies,with different associated institutions.In places where Europeans faced high mortality rates,they could not settle and were more likely to set up extractive institutions.These institutions persisted to the present.Exploiting differences in European mortality rates as an instrument for current institutions,we estimate large effects of institutions on income per capita.Once the effect of institutions is controlled for,countries in Africa or those closer to the equator do not have lower incomes.(JEL O11,P16,P51) What are the fundamental causes of the tionary policies will invest more in physical large differences in income per capita across and human capital,and will use these factors countries?Although there is still little con- more efficiently to achieve a greater level of sensus on the answer to this question,differ- income (e.g.,Douglass C.North and Robert ences in institutions and property rights have P.Thomas,1973;Eric L.Jones,1981;North, received considerable attention in recent 1981).This view receives some support from years.Countries with better "institutions," cross-country correlations between measures more secure property rights,and less distor- of property rights and economic development (e.g.,Stephen Knack and Philip Keefer,1995; Paulo Mauro,1995;Robert E.Hall and Acemoglu:Department of Economics,E52-380b Charles I.Jones,1999;Dani Rodrik,1999), Massachusetts Institute of Technology,Cambridge,MA and from a few micro studies that investigate 02319,and Canadian Institute for Advanced Research (e-mail:daron@mit.edu);Johnson:Sloan School of Man- the relationship between property rights and agement,Massachusetts Institute of Technology,Cam- investment or output (e.g.,Timothy Besley, bridge,MA 02319 (e-mail:sjohnson@mit.edu);Robinson: 1995;Christopher Mazingo,1999;Johnson et Department of Political Science and Department of Eco- al,1999). nomics,210 Barrows Hall,University of California,Berke- At some level it is obvious that institutions ley,CA 94720(e-mail:jamesar@socrates.berkeley.edu). We thank Joshua Angrist,Abhijit Banerjee,Esther Duflo, matter.Witness,for example,the divergent Stan Engerman,John Gallup,Claudia Goldin,Robert paths of North and South Korea,or East and Hall,Chad Jones,Larry Katz,Richard Locke,Andrei West Germany,where one part of the country Shleifer,Ken Sokoloff,Judith Tendler,three anonymous stagnated under central planning and collec- referees,and seminar participants at the University of tive ownership,while the other prospered California-Berkeley,Brown University,Canadian Insti- tute for Advanced Research,Columbia University,Har- with private property and a market economy vard University,Massachusetts Institute of Technology, Nevertheless,we lack reliable estimates of National Bureau of Economic Research,Northwestern the effect of institutions on economic perfor- University,New York University,Princeton University, mance.It is quite likely that rich economies University of Rochester,Stanford University,Toulouse University,University of California-Los Angeles,and the choose or can afford better institutions.Per- World Bank for useful comments.We also thank Robert haps more important,economies that are dif- McCaa for guiding us to the data on bishops'mortality. ferent for a variety of reasons will differ both 1369The Colonial Origins of Comparative Development: An Empirical Investigation By DARONACEMOGLU, SIMON JOHNSON, AND JAMES A. ROBINSON* We exploit differences in European mortality rates to estimate the effect of institu￾tions on economic pe@ormance. Europeans adopted very dzrerent colonization policies in different colonies, with different associated institutions. In places where Europeans faced high mortality rates, they could not settle and were more likely to set up extractive institutions. These institutions persisted to the present. Exploiting differences in European mortality rates as an instrument for current institutions, we estimate large effects of institutions on income per capita. Once the effect of institutions is controlled for, countries in Africa or those closer to the equator do not have lower incomes. (JEL 011, P16, P51) What are the fundamental causes of the large differences in income per capita across countries? Although there is still little con￾sensus on the answer to this question, differ￾ences in institutions and property rights have received considerable attention in recent years. Countries with better "institutions," more secure property rights, and less distor- * Acemoglu: Department of Economics, E52-380b, Massachusetts Institute of Technology, Cambridge, MA 02319, and Canadian Institute for Advanced Research (e-mail: daron@mit.edu); Johnson: Sloan School of Man￾agement, Massachusetts Institute of Technology, Cam￾bridge, MA 02319 (e-mail: sjohnson@mit.edu); Robinson: Department of Political Science and Department of Eco￾nomics, 210 Barrows Hall, University of California, Berke￾ley, CA 94720 (e-mail: jamesar@socrates.berkeley.edu). We thank Joshua Angrist, Abhijit Banerjee, Esther Duflo, Stan Engerman, John Gallup, Claudia Goldin, Robert Hall, Chad Jones, Larry Katz, Richard Locke, Andrei Shleifer, Ken Sokoloff, Judith Tendler, three anonymous referees, and seminar participants at the University of California-Berkeley, Brown University, Canadian Insti￾tute for Advanced Research, Columbia University, Har￾vard University, Massachusetts Institute of Technology, National Bureau of Economic Research, Northwestern University, New York University, Princeton University, University of Rochester, Stanford University, Toulouse University, University of California-Los Angeles, and the World Bank for useful comments. We also thank Robert McCaa for guiding us to the data on bishops' mortality. tionary policies will invest more in physical and human capital, and will use these factors more efficiently to achieve a greater level of income (e.g., Douglass C. North and Robert P. Thomas, 1973; Eric L. Jones, 1981; North, 1981). This view receives some support from cross-country correlations between measures of property rights and economic development (e.g., Stephen Knack and Philip Keefer, 1995; Paulo Mauro, 1995; Robert E. Hall and Charles I. Jones, 1999; Dani Rodrik, 1999), and from a few micro studies that investigate the relationship between property rights and investment or output (e.g., Timothy Besley, 1995; Christopher Mazingo, 1999; Johnson et al., 1999). At some level it is obvious that institutions matter. Witness, for example, the divergent paths of North and South Korea, or East and West Germany, where one part of the country stagnated under central planning and collec￾tive ownership, while the other prospered with private property and a market economy. Nevertheless, we lack reliable estimates of the effect of institutions on economic perfor￾mance. It is quite likely that rich economies choose or can afford better institutions. Per￾haps more important, economies that are dif￾ferent for a variety of reasons will differ both