Carstensen, KaiGundlach, Erich2013-12-202013-12-202006-06-08World Bank Economic Reviewdoi:10.1093/wber/lhl001https://hdl.handle.net/10986/16439Some recent empirical studies deny any direct effect of geography on development and conclude that institutions dominate all other potential determinants of development. An alternative view emphasizes that geographic factor such as disease ecology, as proxied by the prevalence of malaria, may have a large negative effect on income, independent of the quality of a country's institutions. For instance, pandemic malaria may create a large economic burden beyond medical costs and forgone earnings by affecting household behavior and such macroeconomic variables as international investment and trade. After controlling for institutional quality, malaria prevalence is found to cause quantitatively important negative effects on income. The robustness of this finding is checked by employing alternative instrumental variables, tests of over-identification restrictions, and tests of the validity of the point estimates and standard errors in the presence of weak instruments. The baseline findings appear to be robust to using alternative specifications, instrumentations, and samples. The reported estimates suggest that good institutions may be necessary but not sufficient for generating a persistent process of successful economic development.en-USCC BY-NC-ND 3.0 IGOACCOUNTABILITYADULT POPULATIONANOPHELES MOSQUITOANOPHELES MOSQUITOESANOPHELINE MOSQUITOBAYESIAN INFORMATION CRITERIONBENCHMARKBILATERAL TRADEBURDEN OF MALARIABUREAUCRATIC QUALITYCALCULATIONCAUSAL EFFECTCAUSAL EFFECTSCDCLEAN WATERCOMPARATIVE ADVANTAGESCOMPLICATIONSCONFIDENCE INTERVALSCORRUPTIONDATA QUALITYDEPENDENCY RATIODEPENDENCY RATIOSDEVELOPMENT POLICIESDISEASEDISEASE BURDENECONOMETRICSECONOMIC ACTIVITYECONOMIC CONDITIONSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC HISTORIANSECONOMIC HISTORYECONOMIC INTEGRATIONECONOMIC PERFORMANCEECONOMIC POLICIESECONOMIC RESEARCHENDOGENOUS VARIABLESEQUATIONSEXOGENOUS VARIABLESFACTOR ENDOWMENTSFERTILITYFIXED COSTSFOREIGN AIDFOREIGN DIRECT INVESTMENTFOREIGN INVESTORSGDPGDP PER CAPITAGOOD GOVERNANCEGOVERNANCE INDICATORGOVERNANCE INDICATORSGOVERNANCE QUALITYGOVERNMENT EFFECTIVENESSGROSS DOMESTIC PRODUCTHEALTH INTERVENTIONSHIGH FERTILITY RATEHOME COUNTRIESHUMAN CAPITALHYGIENEILLNESSIMPACT OF MALARIAINCOMEINCOME DISTRIBUTIONINCOME LEVELINDUSTRIAL REVOLUTIONINFECTIONINFECTIONSINSTITUTIONAL FRAMEWORKINSTITUTIONAL QUALITYINSTRUMENTAL VARIABLESINTERNATIONAL TRADELABOR FORCELEVEL OF DEVELOPMENTLINEAR MODELSLONGEVITYLOWER FERTILITYMACROECONOMIC VARIABLESMALARIAMALARIA INFECTIONMALARIA INFECTIONSMALARIA TRANSMISSIONMONETARY ECONOMICSMORTALITYNATURAL RESOURCESNEGATIVE EFFECTSOUTPUT PER CAPITAPANDEMICPER CAPITA INCOMEPHYSICAL GEOGRAPHYPOLITICAL ECONOMYPOLITICAL STABILITYPOOR HEALTHPOPULATION SIZEPRECISIONPREVALENCEPRIVATE PROPERTYPROBABILITYPROPERTY RIGHTSPUBLIC HEALTHPURCHASING POWERPURCHASING POWER PARITYREAL GDPREASONINGREGULATORY QUALITYRESPECTREVERSE CAUSALITYRISK OF INFECTIONRISK OF MALARIARULE OF LAWSAMPLE SIZESCIENTISTSSICKLE CELL ANEMIASKILL LEVELSOCIAL BURDENSPECIESSTANDARD ERRORSSTATISTICAL INFERENCESTATISTICAL SIGNIFICANCESURVIVAL RATETHEOREMSTRANSMISSION OF MALARIATREATMENTTROPICAL DISEASESTROPICAL MEDICINEUNEQUAL DISTRIBUTIONVALIDITYVECTORSWEALTHWORKFORCEWorld Bank10.1596/16439