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The Role of Historical Malaria in Institutions and Contemporary Economic Development

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Abstract

This research examines the causal impact of institutional quality on economic development from a novel perspective. At the country level, we exploit variation in the natural malaria prevalence in 1900, just before vector-control methods were developed, to instrument for institutional quality using a two-stage least squares instrumental variables framework. Our instrument is a population-weighted average of malaria endemicity estimates for the year 1900 developed by the World Health Organization scientists in the 1960s. We argue that this measure of historical malaria offers more expansive geographic information about the disease environment, and our baseline IV estimates reveal that greater institutional quality causes greater contemporaneous economic growth. Next, we investigate the robustness of these baseline results to alternative explanations, including the role of geography and the role of early colonizers’ experiences, as the causal link between the early disease environmental, institutional quality, and contemporary growth. As an additional test of the explanatory power of malaria endemicity in 1900 as an instrumental variable, we replace our instrument for settler mortality and replicate the core results from the seminal study on colonial origins of comparative development by Acemoglu et al. (2001). In summary, we propose that malaria endemicity estimated for 1900 holistically explains the legacy of early disease on institutional quality development and contemporary economic development, thus significantly contributing to the resolution of the geography versus institutions debate.

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Notes

  1. Note that for estimation purposes we remove islands and small countries from the analysis because of the likelihood of inaccuracy due to the size of the raster data and spillovers with the ocean.

  2. In the “Replication of Acemoglu, Johnson, and Robinson (2001) Core Results” section, we compare malaria endemicity 1900 and settler’s mortality and argue that malaria endemicity 1900 allows greater variation in terms of variables and sample of colonies.

  3. Regulatory quality is a widely used indicator for institutional quality, along with rule of law, political stability, government effectiveness, among others, as part of WGI developed by Daniel Kaufman and Aart Kraay. The variable “regulatory quality” captures “… perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private-sector development”. Its values vary between − 2.5 and 2.5, with higher values corresponding to higher regulatory quality.

  4. The beta coefficient equivalent was estimated using the standardized variables.

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Authors and Affiliations

  1. Naval Postgraduate School, 699 Dyer Road, Room M8, Monterey, CA, 93943, USA

    Elizabeth Gooch

  2. International Center for Public Policy (ICePP), Georgia State University, P.O. Box 3992, Atlanta, GA, 30302-3992, USA

    Jorge Martinez-Vazquez & Bauyrzhan Yedgenov

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  1. Elizabeth Gooch
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  2. Jorge Martinez-Vazquez
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  3. Bauyrzhan Yedgenov
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Correspondence to Bauyrzhan Yedgenov.

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Gooch, E., Martinez-Vazquez, J. & Yedgenov, B. The Role of Historical Malaria in Institutions and Contemporary Economic Development. St Comp Int Dev 58, 252–279 (2023). https://doi.org/10.1007/s12116-022-09370-z

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