Economic Development and the Geography of Institutions

Posted: 28 Apr 2009

See all articles by Erik Maarten Bosker

Erik Maarten Bosker

University of Groningen; Erasmus University Rotterdam (EUR) - Department of Economics

Harry Garretsen

Utrecht University - School of Economics; CESifo (Center for Economic Studies and Ifo Institute); Radboud University Nijmegen - Department of Economics

Date Written: May 2009

Abstract

To explain cross-country income differences, research has recently focused on the so-called deep determinants of economic development, notably institutions and geography. This article shows that it is not only absolute geography, in terms of for instance climate or being landlocked, but also relative geography, the spatial linkages between countries, that matters for a country's GDP per capita. More specifically, we analyze the importance of the geography of institutions. We show that apart from its own institutions, the institutional quality in neighboring countries is also important for a country's economic development. This finding is robust to various alternative specifications of relative geography, sample size and the inclusion of additional controls.

Keywords: relative geography, economic development, institutions

JEL Classification: O1, F5, O57

Suggested Citation

Bosker, Erik Maarten and Garretsen, Harry, Economic Development and the Geography of Institutions (May 2009). Journal of Economic Geography, Vol. 9, No. 3, pp. 295-328, 2009, Available at SSRN: https://ssrn.com/abstract=1394136 or http://dx.doi.org/lbn047

Erik Maarten Bosker (Contact Author)

University of Groningen ( email )

P.O. Box 800
9700 AH Groningen, Groningen 9700 AV
Netherlands

Erasmus University Rotterdam (EUR) - Department of Economics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Harry Garretsen

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands
+31 0 30 253 9810 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.cesifo.de

Radboud University Nijmegen - Department of Economics ( email )

Nijmegen, 6500 HK
Netherlands
+31 24 361 5889 (Phone)
+31 24 361 1846 (Fax)

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