Rodrik, Subramanian, and Trebbi (2002) contribute to the discussion on the impact of geography, institutions and international trade on cross-national differences in income levels. They find that only institutions exert a significant direct impact on incomes. Meanwhile, international trade has no direct effect and geography has at best weak direct effects on incomes.
Examining its empirical framework, I find that the way the study measures geography is inadequate and that the framework therefore does not treat the three “deeper determinants” equally in the sense of giving the geography-hypothesis a smaller chance to prevail. Based on this finding, the underlying structure is adjusted and developed further to provide an improved basis for future analyses.
Table of Contents
List of abbreviations
1 Introduction
2 Instruments
2.1 AJR instrument
2.2 FR- instrument
3 Measures of geography
4 Empirical framework
5 Conclusion
Appendix
References
- Quote paper
- Peter Hartlieb (Author), 2015, A Review of "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development", Munich, GRIN Verlag, https://www.grin.com/document/315671
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