Cows and conquistadors: a comment on the colonial origins of comparative development

Abstract

Robust estimation of the impact of political institutions on economic development requires the identification of valid instruments for institutional quality. Acemoglu et al. [2001] introduced the use of colonial settler mortality rates as such an instrument. Our paper develops a more eclectic theory of colonial development, and compares the performance of the settler mortality model to alternatives incorporating instruments reflecting the production structure of colonial economies. Ceteris paribus, colonies with a natural comparative advantage in pastoral agriculture were more likely to experience European settlement that led to non-extractive institutions. Some – but not all – of Acemoglu et al.’s conclusions are robust to the use of a wider set of instruments.