I explore the fact that the Mongol Empire invaded most of Eurasia but left Western Europe untouched. I hypothesize that differences in exposure to the Mongols resulted in divergent institutional paths.
Where the Mongols invaded, they set up highly centralized auto- cratic institutions. Meanwhile, Western Europe developed compar- atively more liberal and decentralized institutions. I suggest that these differences in institutions have persisted until the present day.
Using the legacy of Mongol invasions as a factor in the rise of exist- ing institutions as an instrument for current institutions, I find signif- icant effects on current GDP/capita caused by these divergent institutional paths.