Institutions versus Geography: Subnational Evidence from the United States
IMF Working Papers, July 1, 2006
Source details
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- Institutions versus Geography: Subnational Evidence from the United States
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Bibliographic details
- Authors: Alma Romero-Barrutieta, Eric V. Clifton
- Published: July 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451864298.001
Summary
- Empirical studies at the international level have become common, but abstraction has led to calls for subnational studies.
- This paper examines Appalachia, identifying and measuring specific factors so as to obviate the need for instrumental variable techniques.
- The evidence suggests that initial conditions, including both geography and institutions, are very important for economic development, having significant effects lasting hundreds of years.
Key findings
- Initial conditions (geography and institutions) are very important determinants of economic development.
- Measured effects of these initial conditions persist for hundreds of years.
- Subnational analysis of Appalachia allows identification and measurement of specific factors without relying on instrumental variable techniques.
Methodology
- Subnational case study focused on Appalachia in the United States.
- Specific factors at play are identified and measured, removing the need for instrumental variable techniques common in cross-country studies.
Policy implications
- Policies aiming to foster long-run development should account for persistent effects of initial geographic and institutional conditions.
- Institutional reforms and development strategies need to be informed by region-specific measurements of geography and institutions.
Subject areas and keywords
- Subject: Estimation techniques, Institutional arrangements for revenue administration, Personal income, Poverty, Spatial models
- Keywords: parameter estimate, poverty rate, WP
Institutions versus Geography: Subnational Evidence from the United States — IMF Working Paper No. 2006/169