Perhaps my language was a bit simplistic. I shall reference my previous post and add more form the nobel committee:So I doubt that the institutions
set up then were set up to benefit the masses (whether white or not) at all.
The European colonization of vast swathes of the world led to significant transformations in the institutions of many regions and countries under their control. 6 Across their global empires, European countries implemented different institutions depending partly on how attractive it was for their citizens to settle in the colonies in large numbers. When initial conditions were such that migrants entered in large numbers, the colonial powers established institutions that were consistent with the interests of their nationals who settled in the new colonies. When the conditions deterred European settlements, the colonial powers instead maintained or introduced institutions that protected the interests of a small European elite and allowed Europeans to extract as much resources as possible.
What were these initial conditions? One component emphasized by the Laureates was the disease environment. In tropical areas, mortality among the settlers due to diseases such as malaria and yellow fever was high. Therefore, Europeans did not enter in large numbers, and, consequently, they had strong incentives to embark on an extractive colonization strategy. By contrast, in temperate areas – such as Canada and the United States – these diseases were not prevalent. Mortality was thus lower among the settlers, Europeans entered the colonies in larger numbers, and inclusive institutions, favoring the interests of the majority of the population, were more likely to be implemented. Acemoglu, Johnson, and Robinson (2001) argued that the disease environment at the time of colonization provides quasi-experimental variation since the direct impact on contemporary GDP is negligible primarily because of immunity in the local population.
Another component determining the colonization strategy was the size of the local population. It had two implications. First, in places with larger local populations, colonizers faced greater opposition; because of conflict, mortality among the settlers was high, and Europeans entered to a lesser extent. Second, where the local populations were large, the areas were prosperous. This meant there were plenty of resources for the colonizers to extract, and they designed institutions allowing them to exploit the indigenous population and capture as much of the resources – e.g., gold, silver, and sugar – as possible.
This reasoning has a striking implication: if institutions are important, colonized countries that were prosperous pre-colonization should be poorer today because they were more likely to be subject to bad institutions, featuring, e.g., little protection of property rights.
Reversal of Fortune
Settler mortality, institutions, and prosperity