The Reversal of Fortune Thesis Reconsidered
29 Pages Posted: 30 Nov 2010
Date Written: April 2010
Abstract
Acemoglu, Johnson, & Robinson (2002) have claimed that the world income distribution underwent a Reversal of Fortune from 1500 to the present, whereby formerly rich countries in what is now the developing world became poor while poor ones grew rich. We question their analysis with regard to both of their proxies for pre-modern income, namely urbanization and population density. First, an alternative measure of urbanization with more observations generates a positive (but not significant) correlation between pre-modern and contemporary income. Second, we show that their measure of population density as a proxy is highly flawed inasmuch as it does not properly measure density on arable land, and when corrected with better data the relationship is no longer robust. At best our results demonstrate a Reversal of Fortune only for the four neo-Europes of Australia, Canada, New Zealand and the United States; at worst, we show no Reversal for other former colonies.
JEL Classification: D91, I18
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
By C. A. Bayly
-
By C. A. Bayly
-
Historical Lessons About Contemporary Social Welfare: Chinese Puzzles and Global Challenges
By R. Bin Wong
-
How and Why Does History Matter for Development Policy?
By Michael Woolcock, Vijayendra Rao, ...
-
How Does Institutional Change Coincide with Changes in the Quality of Life? An Exemplary Case Study
By Andreas Exenberger and Simon Hartmann
-
Bombs or Ballots: How Do Aggrieved Ethnic Groups Determine Their Political Strategy?
By Andrea Malji