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A Superior Instrument for the Role of Institutional Quality on Economic Development

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Abstract

This paper reexamines the causal link between institutional quality and economic development using "Malaria Endemicity" as an instrument for institutions. This instrument is superior to the previously used instruments in the literature which suffered from measurement error, including "settler mortality." Because the Malaria Endemicity measure captures the malaria environment before the discovery that mosquitoes transmit the disease and before the successful eradication efforts that followed, it is exogenous to both institutional quality and economic development. We find Malaria Endemicity a valid strong instrument which yields larger significant effects of institutions on economic development than those obtained in the previous literature.

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  • Elizabeth Gooch & Jorge Martinez-Vazquez & Bauyrzhan Yedgenov, 2016. "A Superior Instrument for the Role of Institutional Quality on Economic Development," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1610, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper1610
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    Cited by:

    1. Borsky, Stefan & Kalkschmied, Katja, 2019. "Corruption in space: A closer look at the world's subnations," European Journal of Political Economy, Elsevier, vol. 59(C), pages 400-422.

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