Poverty and the Colonial Origins of Elite Capture: Evidence from Philippine Provinces

This paper offers new evidence on the causal link between poverty and elite capture within a democratic country. The extent of elite capture was derived from the names of 64,152 elected officials in four election cycles at the provincial and municipal levels in the Philippines. To identify the causal relationship between elite capture and poverty, this study exploits the exogenous variation in the number of churches constructed in the Philippines during the Spanish colonization period (1521-1898). These structures were built in locations where political families developed and persisted to the present. Using the number of colonial churches as an instrument in a two-stage least-squares regression, this study finds that poverty in Philippine provinces is inversely proportional to the percentage of positions controlled by elites and directly proportional to decreased competition among elites. Results are robust to the measure of poverty used as well as controlling for other plausible channels through which the presence of colonial churches may influence poverty in the Philippine provinces.