The Importance of History for Economic Development

Abstract (Via Nathan Nunn @ NBER)

This article provides a survey of a growing body of empirical evidence that points towards the important long-term effects that historic events can have on current economic development. The most recent studies, using micro-level data and more sophisticated identification techniques, have moved beyond testing whether history matters, and attempt to identify exactly why history matters. The most commonly examined channels include: institutions, culture, knowledge and technology, and movements between multiple equilibria. The article concludes with a discussion of the questions that remain and the direct of current research in the literature.

Introduction (Via Nathan Nunn @NBER)

In recent years, an exciting new literature has emerged empirically examining whether historic events are important determinants of economic development today. The origins of this literature can be traced to three lines of research that began roughly a decade ago. Engerman and Sokoloff (1997, 2002) examined the importance of factor endowments and colonial rule for the subsequent economic development of colonies within the Americas. Acemoglu, Johnson, and Robinson (2001, 2002) developed a research agenda that sought to better understand the historical origins of current institutions and their importance for long-term economic development. The line of inquiry undertaken by La Porta, Lopez-de-Silanes, Shleifer, and Vishny (1997, 1998) also examined the importance of colonial rule, but focused on the legal institutions that were transplanted by the different colonial powers and the long-term consequences this had for investor protection and financial development.

Click Here To Read  A Paper On The History Of Economic Development

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22. April 2009 by Miguel Barbosa
Categories: Curated Readings, Finance & Investing | Leave a comment

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