While reading Adam Smith's, Wealth of nations (Wordsworth editions, Ware, Hertfordshire, UK, 2012), I was amazed by the fact that he can be regarded as a distant predecessor of the theory of colonial origins of institutions and cross-country differences in economic growth. Specifically, I found these passages in which Smith argues that thinly inhabited European colonies had set better political institutions and, consequently, witnessed more rapid growth.
The colony of a civilized nation which takes possession either of a waste country, or of one so thinly inhabited that the natives easily give place to the new settlers, advances more rapidly to wealth and greatness than any other human society. (Book 4. Of systems of political economy, Chapter 7. Of colonies, p. 560)
Plenty of good land, and liberty to manage their own affairs their own way, seem to be the two great causes of the prosperity of all new colonies. In the plenty of good land, the English colonies of North America, though no doubt very abundantly provided, are, however, inferior to those of the Spaniards and Portuguese, and not superior to some of those possessed by the French before the late war. But the political institutions of the English colonies have been more favourable to the improvement and cultivation of this land, than those of the other three nations. (Book 4. Of systems of political economy, Chapter 7. Of colonies, p. 567)
