Why do you think your paper is highly cited?  

I believe this is because it attempts to answer a fundamental question in economics and social science: what are the fundamental causes of the large differences in economic performance across countries? It emphasizes the importance of a society's institutions, and it provides new evidence to support the importance of this institutional channel.

  Does it describe a new discovery or a new methodology that's useful to others? 

It contains both a new discovery and the application of an existing methodology to a new field. The methodology is "instrumental variables" which is common in microeconometric work, but has not been widely applied in cross-country macroeconomic analyses. The difficulty of the instrumental variables strategy is to find a potentially exogenous source of variation, and we achieve this by going back to the colonial history of many areas and collecting historical data.

  Could you summarize the significance of your paper in layman's terms? 

Our paper shows that institutional differences across countries, in particular differences in the extent of property rights enforcement, can explain the bulk of the differences in income per capita across countries. We do this by exploiting differences in colonization experience among countries that were former European colonies, and showing that these differential colonization experiences led to different institutional developments that still affect economic outcomes today.

  How did you become involved in this research?

This is an area that has interested me for a long time, and I had previously done theoretical research related to this topic. My co-authors Simon Johnson and James Robinson and I became interested in the implications of colonial history on institutions, and ultimately formulated our main hypothesis and found the appropriate data for this investigation.