Canada's federal government established the provinces of Saskatchewan and Alberta in 1905, making them approximately equal in area, population, and economy. Roughly one hundred years later, Alberta has three times the population of Saskatchewan and a gross domestic product (GDP) that is more than four times grea ter. The creation of the border represents a "natural experiment" that allows us to assess the relative importance of institutions versus geography to explain the divergent development of the twin provinces. While the perception persists that Saskatchewan's political climate hindered that province's development relative to Alberta's, it is Alberta's early lead in manufacturing, and vast mineral endowments, that present a more convincing explanation for the divergence.
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