The impact of the fundemental determinants of economic development on the gross domestic product per capita: The Old European colonial case

ABSTRACT Explaining the deep income differences between countries The neoclassical model predicts that marginal efficiency of the capital is at a lower level than that of the capital, and that underdeveloped countries will have higher growth rates than the other country groups and that underdeveloped countries will become closer to the income levels of the developed countries. It remained. High-yielding capital owners have not attracted enough to invest in underdeveloped countries. For this reason, the attractiveness of high yields in underdeveloped countries has been a subject of intense research, especially in the last thirty years, by economists and has focused on deeper reasons underlying income differences. While some countries are investing more human and physical capital, they use their resources more efficiently while others have not. Possible explanations for responding to this question have been geographical factors, trade and integration, institutional factors and cultural determinants. While each possible explanation has been successful in terms of disclosing income differences for selected country samples, it is important to note that the institutional quality, trade-integration and self-reliance in working with the questions of which, or whichever comes first, for larger sample countries, (2SLS) method in which vehicle variables are used for sub-Saharan African countries. Acemoğlu, Johnson and Robinson (2001) used mortality rates in the former European colonies as instruments to measure institutional quality. Europeans have built their own institutional structures to the extent that they can be protected from locally specific diseases and this has had a significant impact on the level of income per capita in 2015. For trade-integration purposes, Frankel and Romer (1999) used the shot model as a instrument to measure the trade-integration level. For sub-Saharan African countries, the malaria index values of the World Health Organization using the 2015 World Malaria Disease Report data were used. Up to this time, studies have focused only on the importance of institutional determinants or expressed the uniqueness of geography over economic development. Few studies have shown that these two variables are in common together in determining the level of economic development. As demonstrated by the results of the two-stage least squares model used in the study (2SLS), a 1-point improvement in institutional quality led to an increase of 62 % in per capita income. The sub-Saharan African countries' unique geography and its barriers have caused these countries to reach only 21% of the revenues of the rest of the world. When dummy variables are included for institutional determinants and sub-Saharan African countries, other possible determinants do not have statistically significant results and even negative coefficient estimates are found for geographical variable but dummy variable used to describe sub-Saharan African countries Keywords: Economic Development, Geographical Factors, Trade and Integration, Institutional Factors, Sub-Saharan Africa