Joel Waldfogel: Which country is the best colonizer?

Roundup: Talking About History

[Joel Waldfogel is the Ehrenkranz family professor of business and public policy at the Wharton School of the University of Pennsylvania.]

A generation ago, Christopher Columbus was a hero. No longer. Even my preteen kids can tell you that Columbus' followers brought disease and death to many New World natives. But as the forerunner of European colonization, can Columbus also claim to have ushered in an era of higher standards of living?

One of the deep questions in economics is why some countries are rich and others are poor. It is widely believed that institutions such as clear and enforceable property rights are important to economic growth. Still, debates rage: Do culture, history, government, education, temperature, natural resources, cosmic rays make the difference? The reason it's hard to resolve this question is that we have no controlled experiments comparing otherwise similar places with different sets of legal and economic institutions. In new research, James Feyrer and Bruce Sacerdote, both of Dartmouth College, consider the effect of a particular aspect of history—the length of European colonization—on the current standard of living of a group of 80 tiny, isolated islands that have not previously been used in cross-country comparisons. Their question: Are the islands that experienced European colonization for a longer period of time richer today?

Imagine the ideal experiment for measuring the role of European colonization on economic growth. You would take a bunch of Europeans, set them down on different isolated islands for different lengths of time, wait a few hundred years, and then check to see whether the islands fertilized with Europeans for longer periods had become more prosperous. The insight of Feyrer and Sacerdote's paper is that the colonization that followed European voyages of discovery to the Pacific created just this experiment.

Mitiaro, Pohnpei, and Aitutaki—these are small islands in the Pacific that were colonized by European explorers at different times. They, and 77 other islands in the Atlantic, Pacific, and elsewhere, constitute the data the authors use in their study. Scholars who have made cross-country comparisons before have ignored these islands. Europeans "discovered" some of these places by accident. Pitcairn Island was colonized when the crew of the HMS Bounty staged a mutiny after an arduous trip to Tahiti under Capt. William Bligh. Explorers encountered Penrhyn, in the Cook Islands, after storms wrecked their vessels on its shores.

Feyrer and Sacedote's key findings are that the longer one of the islands spent as a colony, the higher its present-day living standards and the lower its infant mortality rate. Each additional century of European colonization is associated with a 40 percent boost in income today and a reduction in infant mortality of 2.6 deaths per 1,000 births....

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