The Wealth of Subnations: Geography, Institutions, and Within-Country Development
48 Pages Posted: 25 Mar 2013 Last revised: 29 Jun 2014
Date Written: June 26, 2014
Abstract
I study fundamental determinants of economic development in a new dataset covering 1,867 subnational regions from 101 countries, focusing on within-country effects of geography and institutions. I find that several geographic factors have significant explanatory power for within-country differences in per-capita GDP, including terrain ruggedness, tropical climate, ocean access, temperature range, storm risk, and, to a lesser extent, elevation, malaria risk, and natural resources. I find no evidence of a positive effect of subnational institutions on within-country differences in income, whether institutions are measured by property rights protection, corruption control, law and order, or regulatory efficiency.
Keywords: Economic development, Geography, Institutions
JEL Classification: O11, O13, R11
Suggested Citation: Suggested Citation
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