Easterly & Levine on the “European Origins of Economic Development”
William Easterly and Ross Levine have an interesting new NBER working paper, “The European Origins of Economic Development” which makes an important contribution to understanding long-term economic development, primarily by discussing a new dataset on the European share of population in various countries during the early stages of colonization. In it, they find that 47 percent of average global development levels today are due to Europeans.
European population levels in early colonization is important according to a long line of research in economic history. Acemoglu, Johnson and Robinson (2001), for example, argued that small numbers of Europeans settled in places that were not very pleasant (due to high settler mortality rates) and that those places never got the types of institutions that were conducive to long-term economic development. In an earlier paper, Engerman and Sokoloff made a similar point in arguing that differences in wealth, human capital and political power had a strong influence on the long-term evolution of economic institutions. Of course, both of these papers (and many others in this literature) rely on North’s work on economic institutions (see, for example, North and Thomas, The Rise of the Western World).