insignificant once four influential observations were discarded. Here however we focus on this main specification, and show more formally below that the<sup>apparentsignificance</sup> of institutional quality vanishes once we take weak identification into account.

Table 3 presents the baseline RST specification, and three variants.<sup>RST</sup> regress log per capita GDP on distance from the equator, the same institutional<sup>quality</sup> variable as in DK, and trade as a fraction of GDP in local currency units.<sup>3Intheir</sup> preferred 80-country specification, they use settler mortality from AJR and distance<sup>from</sup> FR as instruments. The first column of Table 3 replicates their basic specification.<sup>To</sup> conserve on space, we again suppress the coefficient on distance<sup>from the equator (and</sup> all other included exogenous variables). The IV estimate of<sup>the effect of institutionsis</sup> positive, large, and highly significant using a conventional t-test. In contrast,<sup>trade</sup> enters negatively and insignificantly.

RST go on to provide a number of robustness checks on this basic<sup>variant.A</sup> subset of these are reported in the remaining columns of Table 3. In specification<sup>3.2,</sup> they replace the local currency trade share with the PPP trade share<sup>in order to make</sup> their results more comparable with DK and AC. In specification 3.3 they return to local currency trade shares, but add measures of domestic market size<sup>(thelogarithmsof</sup> area and population) in order to make their results more comparable<sup>with the originalFR</sup> paper which included these variables. In specification 3.4 we report<sup>one of several</sup> specifications produced by RST including a variety of other variables<sup>capturing different</sup> channels through which geography might matter for development. We focus on<sup>acluster</sup> of three variables they identify as jointly significant, consisting of land area<sup>in thetropics,</sup> number of frost-days per year, and the incidence of malaria. In each of these robustness checks, they find that institutions enter the IV specification positively and with 3In their paper, RST argue that this is preferable to using PPP-adjusted<sup>trade shares as do AC</sup> and DK. The sketch a simple model in which an increase in productivity<sup>which raises therelative</sup> price of non-tradeables relative to the benchmark country will also raise the PPP-adjusted trade ratio. This is because the PPP-adjusted GDP will fall to reflect the higher price<sup>of non-tradeables.</sup> Since the increase in productivity raises income, this can introduce a spurious correlation between income and the PPP-trade share. While the choice of denominator for the trade<sup>ratio is</sup> not the focus of this paper, we note in passing that we are not entirely convinced<sup>by this</sup> argument. First, it as long as these other sources of productivity differences<sup>are uncorrelatedwith</sup> the FR instrument, this potential bias will not matter for the IV coefficient estimates. Second, at a more intuitive level, if we want to capture the size of the traded sector relative<sup>to overalleconomic</sup> activity, it seems natural to use an internationally-comparable measure of overall economic activity in constructing trade shares.

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