DISEASE AND DEVELOPMENT IN HISTORICAL PERSPECTIVE

Health conditions and disease environments are important for economic outcomes. This paper argues that the main impact of disease environments on the economic development of nations is not due to the direct effect of health conditions on income, but rather because of their indirect effect via institutions. Health does affect income directly, but this can explain only a small fraction of today's differences in per capita income. In contrast, when previously isolated populations came into contact during the period of European colonial expansion, differences in disease environments had a major impact on the path of institutional development and consequently first-order consequences for economic growth. (JEL: I12, O12)