Institutions and Geography as Sources of Economic Development

Journal of International Development, Vol. 18, No. 3, pp. 351-378, 2006

Posted: 14 Apr 2006

See all articles by Andrea Filippo Presbitero

Andrea Filippo Presbitero

Università Politecnica delle Marche - Department of Economics; Centre for Macroeconomics & Finance Research (CeMaFiR)

Abstract

This work investigates the roots of economic development. The debate about the predominance of institutions over geography is far from reaching a firm conclusion, and this analysis highlights the main difficulties that should be addressed in order to find out the real determinants of long-run economic growth. I argue that the institutional view is not as strong as it may appear: different specifications and different institutional indicators undermine the exclusive importance of institutions. Geographical factors, related to the health and sanitary conditions and to the accessibility to the sea of a country, play a role in economic development, that goes beyond the way in which they shape institutions. The empirical evidence implies that the development policies should be directed to improving not only the quality of governance, but also the sanitary conditions in the least developed countries. However, since there is a lack of accurate indicators and difficult problems of endogeneity, more reliable instruments and indicators of geography and institutions are needed in order to achieve a firm conclusion.

Keywords: Economic development, Institutions, Geography, Instrumental variables

JEL Classification: C31, O10, O11, P16

Suggested Citation

Presbitero, Andrea Filippo, Institutions and Geography as Sources of Economic Development. Journal of International Development, Vol. 18, No. 3, pp. 351-378, 2006. Available at SSRN: https://ssrn.com/abstract=895668

Andrea Filippo Presbitero (Contact Author)

Università Politecnica delle Marche - Department of Economics ( email )

Piazzale Martelli, 8
Ancona, AN 60121
Italy
+39 0712207074 (Phone)

HOME PAGE: http://sites.google.com/site/presbitero/

Centre for Macroeconomics & Finance Research (CeMaFiR) ( email )

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Milan, 20100
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