Existing literature suggests that either colonial settlement conditions or the identity of colonizer were influential in shaping the post-colonial institutional environment, which in turn has impacted long-run economic development. These two potential identification strategies have been treated as substitutes. We argue that the two factors should instead be treated as complementary and develop an alternative and unified IV approach that simultaneously accounts for both settlement conditions and colonizer identity to estimate the potential causal impact of a broad cluster of economic institutions on log real GDP per capita for a sample of former colonies. Using population density in 1500 as a proxy for settlement conditions, we find that the impact of settlement conditions on institutional development is much stronger among former British colonies than colonies of the other major European colonizers. Conditioning on several geographic factors and ethno-linguistic fractionalization, our baseline 2SLS estimates suggest that a standard deviation increase in economic institutions is associated with a three-fourth standard deviation increase in economic development. Our results are robust to a number of additional control variables, country subsample exclusions, and alternative measures of institutions, GDP, and colonizer classifications. We also find evidence that geography exerts both an indirect and direct effect on economic development.

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A growing body of evidence documents a vast array of economic and social ill-effects of public perceived corruption. These findings and the scant evidence of recent success in the fight against corruption beg the question: how to abate it? We document the existence of a negative, statistically significant and quantitatively large impact of economic freedom (our proxy for institutions of capitalism, markets and competition) on public corruption. This negative response of corruption to economic freedom holds after allowing for non-linearities interacting economic freedom and political rights, endowments, legal families, ethnicity and for robust determinants of corruption uncovered by Daniel Treisman

A growing body of research suggests that private property rights are an important determinant of economic development. This paper assesses five commonly used measures of property rights and their relative ability to predict economic development. The International Country Risk Guide risk of expropriation and World Governance Indicators rule of law measures, as well as property rights indices from the Fraser Institute and Heritage Foundation, are all positively and robustly associated with GDP per capita. Polity IV's executive constraints measure has a statistically and economically weaker impact. This paper also addresses the methodological strengths and weaknesses of each measure to guide researchers in selecting an appropriate measure for empirical studies.