The economic policies which encouraged the development of colonies particularly by Northern Europe is mercantilism.
Mercantilism was an economic policy which was developed and promoted by European imperial powers during the period of the new monarchies, and this later culminated with the rise of the absolutist states. It was promoted as a method to enrich and benefit the home country at the colonies expense.
Mercantilism produced wealth such as gold and silver for the governments of imperialist countries. This system provided economic security to the home country by improving economic situations of other European countries.
Hence, mercantilism encouraged the development of European colonies.
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