The Primacy of Institutions Reconsidered : Direct Income Effects of Malaria Prevalence
Some recent empirical studies deny any direct effect of geography on development and conclude that institutions dominate all other potential determinants of development. An alternative view emphasizes that geographic factor such as disease ecology,...
| Main Authors: | , |
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| Format: | Journal Article |
| Language: | English en_US |
| Published: |
Oxford University Press on behalf of the World Bank
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2006/09/17760693/primacy-institutions-reconsidered-direct-income-effects-malaria-prevalence http://hdl.handle.net/10986/16439 |
| Summary: | Some recent empirical studies deny any
direct effect of geography on development and conclude that
institutions dominate all other potential determinants of
development. An alternative view emphasizes that geographic
factor such as disease ecology, as proxied by the prevalence
of malaria, may have a large negative effect on income,
independent of the quality of a country's institutions.
For instance, pandemic malaria may create a large economic
burden beyond medical costs and forgone earnings by
affecting household behavior and such macroeconomic
variables as international investment and trade. After
controlling for institutional quality, malaria prevalence is
found to cause quantitatively important negative effects on
income. The robustness of this finding is checked by
employing alternative instrumental variables, tests of
over-identification restrictions, and tests of the validity
of the point estimates and standard errors in the presence
of weak instruments. The baseline findings appear to be
robust to using alternative specifications,
instrumentations, and samples. The reported estimates
suggest that good institutions may be necessary but not
sufficient for generating a persistent process of successful
economic development. |
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