Geography Rules Too! Economic Development and the Geography of Institutions

34 Pages Posted: 8 Aug 2006

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: July 2006

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 paper sheds a different light on these determinants. We use spatial econometrics to analyse the importance of the geography of institutions. We show that it is not only absolute geography, in terms of for instance climate, but also relative geography, the spatial linkages between countries, that matters for a country's gdp per capita. Apart from a country's own institutions, institutions in neighboring countries turn out to be relevant as well. This finding is robust to various alternative specifications.

JEL Classification: O11, F43

Suggested Citation

Bosker, Erik Maarten and Garretsen, Harry, Geography Rules Too! Economic Development and the Geography of Institutions (July 2006). CESifo Working Paper Series No. 1769, Available at SSRN: https://ssrn.com/abstract=922675

Erik Maarten Bosker

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 (Contact Author)

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)

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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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