The influence of government revenue, primarily taxation, on institutional quality has increasingly been identified as a key issue for state building. This study juxtaposes the hypothesis, as presented by Acemoglu, Johnson and Robinson (2001), that colonies where European settlers focused...

This paper studies whether institutions matter for economic performance. For this aim, we first construct a simple framework illustrating how to examine the interaction between institutions and economic performance from a different point of view. Then, using this framework, we introduce an...