Economic growth and economic development 209

Introduction to Modern Economic Growth shows that there were very large differences in European mortality Countries such as Australia, New Zealand and the United States were very healthy, and existing evidence suggests that life expectancy in Australia and New Zealand was in fact greater than in Britain In contrast, all Europeans faced extremely high mortality rates in Africa, India and South-East Asia Differential mortality was largely due to tropical diseases such as malaria and yellow fever and at the time it was not understood how these diseases arose nor how they could be prevented or cured Avg Protect Against Risk Expropriation 10 NZL AUS USA CAN SGP GMB IND HKG MYS BRA CHL MEXBHS TTO COL VEN MAR CRI URY PRY EGY ECU DZA TUN ARG ZAF LKA PER BOL PAK GUY GAB IDN JAM CIV TGO VNM DOM KEN SEN PAN TZA CMR GIN GHA SLE NGA HND BGD GTM SLV NIC AGO NER COG BFA UGA SUR MDG MLI SDN HTI ZAR Log Settler Mortality Figure 4.11 The relationship between mortality of potential European settlers and current economic institutions Figures 4.11 and 4.12 already show that, if we accept the exclusion restriction that the mortality rates of potential European settlers should have no effect on current economic outcomes other than through institutions, there is a large impact of economic institutions on economic performance This is documented in detail in Acemoglu, Johnson and Robinson (2001), who present a range of robustness checks confirming this result Their estimates suggest that most of the gap between rich and poor countries today is due to differences in economic institutions For example, the evidence suggests that over 75% of the income gap between relatively rich and 195