NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development

Dani Rodrik, Arvind Subramanian, Francesco Trebbi

NBER Working Paper No. 9305
Issued in November 2002
NBER Program(s):   ITI

We estimate the respective contributions of institutions, geography, and trade in determining income levels around the world, using recently developed instruments for institutions and trade. Our results indicate that the quality of institutions trumps' everything else. Once institutions are controlled for, measures of geography have at best weak direct effects on incomes, although they have a strong indirect effect by influencing the quality of institutions. Similarly, once institutions are controlled for, trade is almost always insignificant, and often enters the income equation with the wrong' (i.e., negative) sign, although trade too has a positive effect on institutional quality. We relate our results to recent literature, and where differences exist, trace their origins to choices on samples, specification, and instrumentation.

download in pdf format
   (556 K)

email paper

This paper is available as PDF (556 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w9305

Published: Rodrik, Dani, Arvind Subramanian and Francesco Trebbi. "Institutions Rule: The Primacy Of Institutions Over Geography And Integration In Economic Development," Journal of Economic Growth, 2004, v9(2,Jun), 131-165.

Users who downloaded this paper also downloaded these:
Campbell and Shiller w8221 Valuation Ratios and the Long-Run Stock Market Outlook: An Update
Hausman and Rodrik w8952 Economic Development as Self-Discovery
Rodriguez and Rodrik w7081 Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence
Alesina and Rodrik w3668 Distributive Politics and Economic Growth
Engerman and Sokoloff w9259 Factor Endowments, Inequality, and Paths of Development Among New World Economics
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us