The Economic Effects of Geography: Colombia as a Case Study

Abstract

This paper quantifies the economic impact of geographical features using Colombian data at the municipal level. We use the proportion of slave population in 1835 as an instrument of current institutions. We find that, controlling for institutional quality, geographical characteristics, such as the percentage of flat terrain, the proximity to the marketplace and the proximity to the main rivers are statistically-significant determinants of income per capita and have large economic effects.

Keywords

• Geography
• climate
• development
• institutions