Смотрите запись семинара "The blessings of extractive institutions. Colonial revenue-raising and modern-day institutions in British colonies" (Center for Institutional Studies Research Seminar)

Speaker: Rasmus Broms (University of Gothenburg)

Speaker: Rasmus Broms (University of Gothenburg)

February 13, Thursday, Maysnitskaya 24, building 3, room 424, 18.30. 

The impact of good institutions has been found to be of utmost importance to a wide range of public goods and human wellbeing. Nevertheless, the question of what creates institutional quality is still a key puzzle in political science. Recently, much attention has been devoted to tracing the roots of variation in modern-day institutional quality back to historical circumstances. In one of the most cited hypotheses regarding institution building, Acemoglu, Johnson and Robinson (2001) attribute poor institutional quality to the colonial era and the creation of socalled ‘extractive institutions’. These, the authors claim, were set up by European colonizers in areas unsuitable for large-scale settlement, and were designed to maximize revenue from the colony to the metropolitan power, rather than building institutions set to benefit the population and secure their property rights. This argument clashes with claims put forth within the field of fiscal sociology, which argues that revenue-raising, mainly in the form of taxation, improves states’ bureaucratic capacity, while forcing rulers to make bargains with the citizenry over the revenues collected. This is said to result in improved institutional quality. This study presents empirical evidence that starkly contradicts the extractive institutions-hypothesis, and supports the notion that increased efforts in raising revenue can be linked to better institutions. Using colonial fiscal records from a sample of 29 British colonies, results from cross-country regression analyses show that colonial revenue extraction during the early 20th century, measured as income-adjusted revenue level, can be linked with higher institutional quality today. This effect is substantial and robust to several specifications of both revenue-level and institutional quality, including measures of government effectiveness, rule of law, and corruption. The results hold under control for a range of relevant control variables, including widely used precolonial and geographic factors.

Working paper: download