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?The short answer's yes.
I'd like to hear Jared Diamond's take on it, but it sounds like an interesting study. I haven't read it, but if I have some time, maybe I will.
More: I've learned that Little Green Blogger Ariel Stern was the head research assistant on this paper. Congrats, Ariel!