Colonial Origins of Comparative Development

The Colonial Origins of Comparative Development

Colonial Origins of Comparative Development

The theory of the Colonial Origins of Comparative Development posits that the economic performance of countries today can be traced back to the colonial era. This theory is primarily associated with the work of economists Daron Acemoglu, Simon Johnson, and James A. Robinson. Their research suggests that the institutions established during the colonial period have had a lasting impact on the economic development of former colonies.

Overview

The central argument of the theory is that the type of institutions established by colonial powers had a significant influence on the economic development of the colonies. The theory distinguishes between two types of colonial institutions: extractive institutions and inclusive institutions.

Extractive Institutions

Extractive institutions were established in colonies where the primary goal was to extract resources and wealth. These institutions were characterized by a lack of property rights, limited political freedom, and a focus on short-term gains. Examples of colonies with extractive institutions include many parts of Africa, Latin America, and Southeast Asia.

Inclusive Institutions

Inclusive institutions, on the other hand, were established in colonies where settlers aimed to create a new society. These institutions promoted property rights, political freedom, and long-term investment. Examples of colonies with inclusive institutions include the United States, Canada, Australia, and New Zealand.

Determinants of Institutional Development

The theory also explores the factors that influenced whether a colony developed extractive or inclusive institutions. One key factor was the disease environment. In regions where European settlers faced high mortality rates due to diseases such as malaria and yellow fever, they were less likely to settle and more likely to establish extractive institutions. Conversely, in regions with lower mortality rates, settlers were more likely to establish inclusive institutions.

Impact on Modern Economic Development

The legacy of colonial institutions has had a profound impact on modern economic development. Countries with a history of inclusive institutions tend to have higher levels of economic development, better governance, and stronger property rights. In contrast, countries with a history of extractive institutions often struggle with poverty, corruption, and weak governance.

Criticism and Debate

The theory of Colonial Origins of Comparative Development has generated significant debate among scholars. Critics argue that the theory may oversimplify the complex factors that influence economic development. Some scholars also point out that other factors, such as geography, culture, and post-colonial policies, play a crucial role in shaping economic outcomes.

See Also

• Institutional economics
• Economic history
• Development economics
• Colonialism
• Daron Acemoglu
• Simon Johnson (economist)
• James A. Robinson (economist)

Further Reading

• Why Nations Fail
• The Colonial Origins of Comparative Development: An Empirical Investigation