Peter argues that macro policy (not institutions) explains why Barbados has outperformed Jamaica. The Acemoglu research agenda needs more data points. There were only 63 colonies studied in the original AJR paper. If researchers start to test for "heterogeneous effects" of institutions by continent and other observable factors then the "large sample" of 63 colonies will suffer from a curse of dimensionality and there won't be enough data to test hypotheses."It may be tempting for readers to regard this paper as a quaint tale of two exotic islands better known for their beaches, music, and Olympic sprinters than their significance in the global economy."
If you'd like to see another pairwise comparison, here is a paper that contrasts Croatia and Latvia.
