This paper focuses on the reasons why some countries are wealthier than others, studies such as Daron Acemoglu (2001) focus on colonisation and its effect on institutions. They state that colonisation led to the introduction of institutions which are present today, these institutions are therefore contributed to better economic performance. The role of better institutions in economic performance is supported by North (1973) who states that better institutions would lead to more investment in human capital and this would result into better economic performance will be realised.
Besley (1995) studied the relationship between property rights and output and identified that there was strong correlation between the two variables, therefore economic performance will also depends on property rights. In this paper we focus on the role of colonisation and establishment of institutions, we also discuss the effect of property right on GDP and the differences in economic performance and the colonisers of the various countries.
A study by Acemoglu (2001) was based on three assumpti ...Show more