Working Papers in Economics,
University of Gothenburg, Department of Economics

Abstract: In recent years, empirical investigations have shown that various aspects of physical geography are closely related to the quality of a country’s economic institutions. For instance, distance from the equator in latitude degrees is positively correlated to both institutional quality and to levels of economic development. In order to reach a better understanding for this type of regularities, this article reviews the growing empirical literature on geography and institutions, as well as a large body of older and newer theoretical works on the social impacts of geography. It is argued that the most plausible candidates for explaining the broadest cross-continental variance in institutional quality are those focusing on historical differences in biogeographical potential for early agriculture and on the importance of disease geography for European colonization strategy.

Keywords: geography; institutions; topography; geology; biogeography; climate; development

JEL-codes: N40; N50; P33

28 pages, September 25, 2003

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Ola Olsson, 'Geography and Institutions: A Review of Plausible and Implausible Linkages', Journal of Economics

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