Rebellions, Technical Change, and the Early Development of Political Institutions in Latin America
AbstractThis paper documents that differences in the early development of institutions in Latin America that led to the consolidation of oligarchic republics in the first decades of the twentieth century, explain the subsequent economic performance in the region. It develops a model with the aim of identifying the factors behind this institutional development. The model predicts that, due to asymmetric and uncertain costs, the risk of conflict leads to political institutions that poorly restrict the powers of chief executives. Since elite members cannot commit to a strong response to this type of conflicts, which in the model arise due to labor coercion, they empower the executive so he may react forcefully to conflicts. Then, in countries with a larger fraction of labor to be coerced, lower executive constraints are imposed. On the other hand, technical advance leads to higher constraints as expropriation becomes more costly. But this does not happen in countries with a large fraction of coerced labor because higher returns raise labor demand and hence larger production comes with more risk of conflict. Finally, the paper conducts an econometric exercise focusing in two factors, namely the risk of uprisings by natives and slaves, which historians have identified as an important risk for the Latin American elites at that time, and the first era of globalization that led to better economic conditions throughout the region. The results show that the dynamics of the institutional gap can be explained to a large extent by the risk of rebellion, globalization, and their interaction.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 688.
Date of creation: May 2013
Date of revision:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Acemoglu, Daron & Robinson, James A, 1998.
"Why did the West Extend the Franchise? Democracy, Inequality and Growth in Historical Perspective,"
CEPR Discussion Papers
1797, C.E.P.R. Discussion Papers.
- Daron Acemoglu & James A. Robinson, 2000. "Why Did The West Extend The Franchise? Democracy, Inequality, And Growth In Historical Perspective," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1167-1199, November.
- Nathan Nunn & Diego Puga, 2007.
"Ruggedness: The blessing of bad geography in Africa,"
2007-09, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales, revised 01 May 2010.
- Nathan Nunn & Diego Puga, 2012. "Ruggedness: The Blessing of Bad Geography in Africa," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 20-36, February.
- Nathan Nunn & Diego Puga, 2009. "Ruggedness: The Blessing of Bad Geography in Africa," NBER Working Papers 14918, National Bureau of Economic Research, Inc.
- Nunn, Nathan & Puga, Diego, 2007. "Ruggedness: The Blessing of Bad Geography in Africa," CEPR Discussion Papers 6253, C.E.P.R. Discussion Papers.
- Jeffrey G. Williamson, 2006. "Globalization and the Poor Periphery before 1950," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262232502, December.
- Stanley L. Engerman & Kenneth L. Sokoloff, 2011. "Introduction to "Economic Development in the Americas since 1500: Endowments and Institutions"," NBER Chapters, in: Economic Development in the Americas since 1500: Endowments and Institutions, pages 1-8 National Bureau of Economic Research, Inc.
- Bockstette, Valerie & Chanda, Areendam & Putterman, Louis, 2002.
" States and Markets: The Advantage of an Early Start,"
Journal of Economic Growth,
Springer, vol. 7(4), pages 347-69, December.
- Louis Putterman & Valerie Bockstette, 2000. "States and Markets:the Advantage of an Early Start," Working Papers 2000-12, Brown University, Department of Economics.
- Bourguignon, F. & Verdier, T., 1997.
"Oligarchy, Democracy, Inequality and Growth,"
DELTA Working Papers
97-10, DELTA (Ecole normale supérieure).
- Summerhill, William, 2010. "Colonial Institutions, Slavery, Inequality, and Development: Evidence from São Paulo, Brazil," MPRA Paper 22162, University Library of Munich, Germany.
- North,Douglass C. & Wallis,John Joseph & Weingast,Barry R., 2009.
"Violence and Social Orders,"
Cambridge University Press, number 9780521761734.
- Bates, Robert H. & Coatsworth, John H. & Williamson, Jeffrey G., 2007.
"Lost Decades: Postindependence Performance in Latin America and Africa,"
The Journal of Economic History,
Cambridge University Press, vol. 67(04), pages 917-943, December.
- Bates, Robert H. & Coatsworth, John H. & Williamson, Jeffrey G., 2007. "Lost Decades: Postindependence Performance in Latin America and Africa," Scholarly Articles 12211559, Harvard University Department of Economics.
- Harley, C.K., 1988.
"Ocean Freight Rates And Productivity, 1740-1913: The Primacy Of Mechanical Invention Reaffirmed,"
UWO Department of Economics Working Papers
8802, University of Western Ontario, Department of Economics.
- Harley, C. Knick, 1988. "Ocean Freight Rates and Productivity, 1740–1913: The Primacy of Mechanical Invention Reaffirmed," The Journal of Economic History, Cambridge University Press, vol. 48(04), pages 851-876, December.
- Melissa Dell, 2010. "The Persistent Effects of Peru's Mining Mita," Econometrica, Econometric Society, vol. 78(6), pages 1863-1903, November.
- Antoni Estevadeordal & Brian Frantz & Alan M. Taylor, 2003.
"The Rise And Fall Of World Trade, 1870-1939,"
The Quarterly Journal of Economics,
MIT Press, vol. 118(2), pages 359-407, May.
- Francisco Gallego & Miriam Bruhn, 2009.
"Good, Bad and Ugly Colonial Activities: Do They Matter for Economic Development?,"
Working Papers ClioLab
6, EH Clio Lab. Instituto de Economía. Pontificia Universidad Católica de Chile.
- Miriam Bruhn & Francisco A. Gallego, 2012. "Good, Bad, and Ugly Colonial Activities: Do They Matter for Economic Development?," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 433-461, May.
- North, Douglass, 1958. "Ocean Freight Rates and Economic Development 1730-1913," The Journal of Economic History, Cambridge University Press, vol. 18(04), pages 537-555, December.
- Sánchez, Fabio & López-Uribe, María del Pilar & Fazio, Antonella, 2010.
"Land Conflicts, Property Rights, and the Rise of the Export Economy in Colombia, 1850–1925,"
The Journal of Economic History,
Cambridge University Press, vol. 70(02), pages 378-399, June.
- Fabio Sánchez Torres & Antonella Fazio Vargas & María del Pilar López-Uribe, 2006. "Land Conflict, Property Rights, and the Rise of the Export Economy in Colombia, 1850-1925," DOCUMENTOS CEDE 005103, UNIVERSIDAD DE LOS ANDES-CEDE.
- Easterly, William, 2007. "Inequality does cause underdevelopment: Insights from a new instrument," Journal of Development Economics, Elsevier, vol. 84(2), pages 755-776, November.
- Álvaro Aguirre, 2011. "The Risk of Civil Conflicts as a Determinant of Political Institutions," Working Papers Central Bank of Chile 649, Central Bank of Chile.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudio Sepulveda).
If references are entirely missing, you can add them using this form.