Settler Colonies versus Extractive Colonies

Historians and economists commonly distinguish two broad colonial models. Settler colonies attracted large, permanent European populations who displaced or marginalized indigenous landholders and built institutions modeled closely on those of the metropole, including secure property rights and representative local government for settlers; extractive colonies, by contrast, were run by a comparatively small European administrative and commercial elite whose primary purpose was to extract labor, agricultural surplus, or minerals for export, governing through coercive institutions with far less concern for indigenous political rights or economic development. In an influential 2001 American Economic Review article, "The Colonial Origins of Comparative Development," the economists Daron Acemoglu, Simon Johnson, and James A. Robinson argued that this divergence was driven substantially by disease environments: where high mortality from malaria and yellow fever made large-scale European settlement impossible, colonizers built extractive institutions instead, and they used historical data on the mortality rates of European soldiers, bishops, and settlers as a statistical instrument linking early institutional choices to income differences observed today.