This paper analyzes the roots of variation in de facto institutions, within a constant de jure institutional setting. We explore the role of rent-seeking episodes in colonial Brazil as determinants of the quality of current local institutions, and argue that this variation reveals a de facto dimension of institutional quality. We show that municipalities with origins tracing back to the sugar-cane colonial cycle -- characterized by a polarized and oligarchic socioeconomic structure -- display today more inequality in the distribution of land. Municipalities with origins tracing back to the gold colonial cycle -- characterized by an over-bureaucratic and heavily intervening presence of the Portuguese state -- display today worse governance practices and less access to justice. The colonial rent-seeking episodes are also correlated with lower provision of public goods and lower income per capita today, and the latter correlation seems to work partly through worse institutional quality at the local level.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
13545.
Length: Date of creation: Oct 2007 Date of revision: Handle: RePEc:nbr:nberwo:13545
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Find related papers by JEL classification: N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General P14 - Economic Systems - - Capitalist Systems - - - Property Rights P28 - Economic Systems - - Socialist Systems and Transition Economies - - - Natural Resources; Environment
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