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Colonialism, Inequality, and Long-Run Paths of Development

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  • Stanley L. Engerman
  • Kenneth L. Sokoloff

Abstract

Over the last few years, colonialism, especially as pursued by Europeans, has enjoyed a revival in interest among both scholars and the general public. Although a number of new accounts cast colonial empires in a more favorable light than has generally been customary, others contend that colonial powers often leveraged their imbalance in power to impose institutional arrangements on the colonies that were adverse to long-term development. We argue here, however, that one of the most fundamental impacts of European colonization may have been in altering the composition of the populations in the areas colonized. The efforts of the Europeans often involved implanting ongoing communities who were greatly advantaged over natives in terms of human capital and legal status. Because the paths of institutional development were sensitive to the incidence of extreme inequality which resulted, their activity had long lingering effects. More study is needed to identify all of the mechanisms at work, but the evidence from the colonies in the Americas suggests that it was those that began with extreme inequality and population heterogeneity that came to exhibit persistence over time in evolving institutions that restricted access to economic opportunities and generated lower rates of public investment in schools and other infrastructure considered conducive to growth. These patterns may help to explain why a great many societies with legacies as colonies with extreme inequality have suffered from poor development experiences.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11057.

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Date of creation: Jan 2005
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Handle: RePEc:nbr:nberwo:11057

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  1. William Easterly & Ross Levine, 2002. "Tropics, Germs, and Crops: How Endowments Influence Economic Development," NBER Working Papers 9106, National Bureau of Economic Research, Inc.
  2. Alesina, Alberto F & Rodrik, Dani, 1991. "Distributive Politics and Economic Growth," CEPR Discussion Papers 565, C.E.P.R. Discussion Papers.
  3. Persson, Torsten & Tabellini, Guido, 1991. "Is Inequality Harmful for Growth? Theory and Evidence," Department of Economics, Working Paper Series qt00x7n68q, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  4. Easterlin, Richard A., 1981. "Why Isn't the Whole World Developed?," The Journal of Economic History, Cambridge University Press, vol. 41(01), pages 1-17, March.
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Cited by:
  1. José Antonio Alonso & Carlos Garcimartín, . "The Determinants of Institutional Quality. More on the Debate," Discussion Papers 09/04, University of Nottingham, CREDIT.
  2. Caselli, Mauro, 2009. "Does wealth inequality reduce the gains from trade?," MPRA Paper 15329, University Library of Munich, Germany.
  3. Arcand, Jean-Louis & Tranchant, Jean-Pierre, 2007. "Institutions, mobilization and rebellion in post-colonial societies," MPRA Paper 19648, University Library of Munich, Germany.
  4. Elise Huillery, 2008. "The Impact of European Settlement within French West Africa. Did pre-colonial prosperous areas fall behind?," Working Papers DT/2008/01, DIAL (Développement, Institutions et Mondialisation).
  5. Sedlarski, Teodor, 2012. "Институционална Еволюция На Обществата Към Отворен Достъп И Пазарна Размяна?
    [Institutional Evolution of Societies towards Open Acc
    ," MPRA Paper 52427, University Library of Munich, Germany.
  6. Falkinger, Josef & Grossmann, Volker, 2013. "Oligarchic land ownership, entrepreneurship, and economic development," Journal of Development Economics, Elsevier, vol. 101(C), pages 206-215.
  7. Angeles, Luis, 2009. "Colonialism, European Descendants and Democracy," SIRE Discussion Papers 2009-50, Scottish Institute for Research in Economics (SIRE).
  8. Dobson, Stephen & Ramlogan-Dobson, Carlyn, 2012. "Why is Corruption Less Harmful to Income Inequality in Latin America?," World Development, Elsevier, vol. 40(8), pages 1534-1545.
  9. Arusha Cooray (University of Wollongong), . "Does Colonialism Exert a Long Term Economic Impact on Adult Literacy?," QEH Working Papers qehwps176, Queen Elizabeth House, University of Oxford.
  10. Raghuram G. Rajan & Luigi Zingales, 2006. "The Persistence of Underdevelopment:Institutions, Human Capital or Constituencies?," Working Papers id:447, eSocialSciences.
  11. Richard Bluhm & Adam Szirmai & UNICEF Innocenti Research Centre, 2011. "Institutions, Inequality and Growth: A review of theory and evidence on the institutional determinants of growth and inequality," Innocenti Working Papers inwopa634, UNICEF Innocenti Research Centre.
  12. Raghuram G. Rajan, 2006. "Competitive Rent Preservation, Reform Paralysis, and the Persistence of Underdevelopment," NBER Working Papers 12093, National Bureau of Economic Research, Inc.
  13. José Antonio Alonso & Carlos Garcimartín, . "Does Aid Hinder Tax Efforts? More Evidence," Discussion Papers 11/04, University of Nottingham, CREDIT.

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