It's Time for Westernization : The Advantages of the Early Start for Long-Term Economic Development at the Local Level

This article examines the “early start” hypothesis at the local level in the context of the Australian colonization. It is found that the longer a place experiences economic activity under European management, the higher economic development it achieves in the long-run. A theoretical framework is proposed under which a set of dynamic forces work in aggregate and enhance urban economic development. The results hold after accounting for spatial autocorrelation among localities and excluding the most and least urbanized places. Moreover, the results are robust after excluding the most arid localities and allowing for the Aboriginals' economic influence. Overall, the nature of Australian colonization reflects a relatively random variation in the duration of the western presence at the local level, causing uneven urban development