Geography vs. institutions at the village level

Michael Grimm, Stephan J. Klasen

Research output: Working paperAcademic

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Abstract

There is a well-known debate about the respective roles of geography versus
institutions in explaining the long-term development of countries. These
debates have usually been based on cross-country regressions where questions
about parameter heterogeneity, unobserved heterogeneity, and endogeneity
cannot easily be controlled for. The innovation of Acemoglu, Johnson and
Robinson (2001) was to address this last point by using settler mortality as an
instrument for endogenous institutions and found that this supported their line
of reasoning. We believe there is value-added to consider this debate at the
micro level within a country as particularly questions of parameter
heterogeneity and unobserved heterogeneity are likely to be smaller than
between countries. Hence, we examine the determinants of economic
development across villages on the Indonesian Island of Sulawesi and find
technology adoption to play a crucial role. We show that geography-induced
migration together with population size foster through their effect on
institutions technology adoption.
Original languageEnglish
Place of PublicationDen Haag
PublisherInternational Institute of Social Studies (ISS)
Number of pages26
Publication statusPublished - Nov 2007

Publication series

SeriesISS working papers. General series
Number449
ISSN0921-0210

Bibliographical note

JEL Codes
K11, O12, Q12.

Series

  • ISS Working Paper-General Series

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