This paper reexamines the causal link between institutional quality and economic development using "Malaria Endemicity" as an instrument for institutions. This instrument is superior to the previously used instruments in the literature which suffered from measurement error, including "settler mortality." Because the Malaria Endemicity measure captures the malaria environment before the discovery that mosquitoes transmit the disease and before the successful eradication efforts that followed, it is exogenous to both institutional quality and economic development. We find Malaria Endemicity a valid strong instrument which yields larger significant effects of institutions on economic development than those obtained in the previous literature.
Gooch, Elizabeth; Martinez-Vazquez, Jorge; and Yedgenov, Bauyrzhan, "A Superior Instrument for the Role of Institutional
Quality on Economic Development" (2016). ICEPP Working Papers. 190.