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Colonial Institutions, Trade Shocks, and the Diffusion of Elementary Education in Brazil, 1889-1930

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  • Aldo Musacchio

    ()
    (Harvard Business School, Business, Government and the International Economy Unit)

  • André Carlos Martínez Fritscher

    ()
    (Banco de México)

  • Martina Viarengo

    ()
    (CEP, London School of Economics)

Abstract

In this paper, we examine the role of trade shocks in promoting the diffusion of elementary education in subnational units in Brazil during a period (1889-1930) in which they had relative financial autonomy to collect export taxes and spend on public goods. The argument is that trade shocks affect asymetrically the tax revenues of state governments and, thus, their expenditures on elementary education per capita according to what crop mix they had. We then show that states with more egalitarian and democratic institutions use positive trade shocks to invest in education, while the opposite takes place in states with less democratic institutions (e.g., in states that had more slaves). We also show using OLS and instrumental variables that positive trade shocks increased expenditures on education per capita and led to higher literacy rates and to more schools per children. The resulting distribution of human capital across states persists until today.

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Bibliographic Info

Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 10-075.

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Length: 43 pages
Date of creation: Mar 2010
Date of revision: Dec 2012
Handle: RePEc:hbs:wpaper:10-075

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References

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  1. Jeffrey G. Williamson, 2009. "History without Evidence: Latin American Inequality since 1491," NBER Working Papers 14766, National Bureau of Economic Research, Inc.
  2. Summerhill, William, 2010. "Colonial Institutions, Slavery, Inequality, and Development: Evidence from São Paulo, Brazil," MPRA Paper 22162, University Library of Munich, Germany.
  3. Joana Narotomi & Rodrigo Soares & Juliano J. Assunção, 2009. "Institutional Development and Colonial Heritage within Brazil," Textos para discussão 561, Department of Economics PUC-Rio (Brazil).
  4. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins Of Technology-Skill Complementarity," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 693-732, August.
  5. Francisco Gallego, 2008. "Historical Origins of Schooling: The Role of Democracy and Political Decentralization," Working Papers ClioLab 7, EH Clio Lab. Instituto de Economía. Pontificia Universidad Católica de Chile.
  6. Musacchio, Aldo, 2008. "Can Civil Law Countries Get Good Institutions? Lessons from the History of Creditor Rights and Bond Markets in Brazil," The Journal of Economic History, Cambridge University Press, vol. 68(01), pages 80-108, March.
  7. Daniel Lederman & William F. Maloney, 2007. "Natural Resources : Neither Curse nor Destiny," World Bank Publications, The World Bank, number 7183, February.
  8. Robert A. Margo, 1990. "Race and Schooling in the South, 1880-1950: An Economic History," NBER Books, National Bureau of Economic Research, Inc, number marg90-1.
  9. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  10. David S. Jacks, Kevin H. O'Rourke and Jeffrey G. Williamson, 2009. "Commodity Price Volatility and World Market Integration since 1700," The Institute for International Integration Studies Discussion Paper Series iiisdp284, IIIS.
  11. Abad, Leticia Arroyo, 2013. "Persistent Inequality? Trade, Factor Endowments, and Inequality in Republican Latin America," The Journal of Economic History, Cambridge University Press, vol. 73(01), pages 38-78, March.
  12. de Carvalho Filho, Irineu & Colistete, Renato P., 2010. "Education Performance: Was It All Determined 100 Years Ago? Evidence From São Paulo, Brazil," MPRA Paper 24494, University Library of Munich, Germany.
  13. Jeffrey G. Williamson, 2009. "History without Evidence: Latin American Inequality since 1491," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 3, Courant Research Centre PEG.
  14. 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.
  15. Anthony J. Venables & William Maloney & Ari Kokko & Claudio Bravo Ortega & Daniel Lederman & Roberto Rigobón & José De Gregorio & Jesse Czelusta & Shamila A. Jayasuriya & Magnus Blomström & L. Coli, . "Natural Resources: Neither Curse nor Destiny," IDB Publications 59538, Inter-American Development Bank.
  16. Williamson, Jeffrey G., 2009. "History without evidence: Latin American inequality since 1491," Center for European, Governance and Economic Development Research Discussion Papers 81, University of Goettingen, Department of Economics.
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Cited by:
  1. Olga Solleder, 2013. "Panel Export Taxes (PET) Dataset: New Data on Export Tax Rates," IHEID Working Papers 07-2013, Economics Section, The Graduate Institute of International Studies, revised 04 Apr 2013.
  2. Tomas Cvrcek & Miroslav Zajicek, 2013. "School, what is it good for? Useful Human Capital and the History of Public Education in Central Europe," NBER Working Papers 19690, National Bureau of Economic Research, Inc.
  3. Kosec, Katrina, 2011. "Politics and preschool : the political economy of investment in pre-primary education," Policy Research Working Paper Series 5647, The World Bank.

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