The Persistence of Colonial Hierarchies: Labor Coercion, Institutional Exclusion and Uneven Current Development in Colombia

Colombia has some of the largest regional development gaps in Latin America. We argue that these disparities stem from the caste hierarchy established in New Granada between the 16th and 18th centuries. Factor endowments and pre-colonial conditions constrained the labor systems the Crown could impose (encomienda, mita, concertaje, or African slavery), but it was the caste hierarchies that emerged from these systems, restricting access to land, education, public office, free labor, and credit, that shaped long-run development trajectories. Using the 1780–1790 censuses, we construct a Colonial Hierarchy Index (CHI) for 1,118 municipalities. We find that higher CHI is associated with lower GDP per capita, lower educational attainment, higher poverty, greater land inequality and informality in land tenure, shorter life expectancy, and higher levels of forced displacement today, even after controlling factor endowments and initial conditions. These endowments explain only part of the withinmunicipality variation in colonial caste composition. The effects of colonial hierarchies operate through land concentration, exclusion from human capital accumulation, restricted access to property, and violent dispossession, and persist across outcomes measured between 1892 and 2012.