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Are Endowments Fate?

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  • Robinson, James A.
  • Nugent, Jeffrey B

Abstract

In recent theories of comparative development the role of institutional differences has been crucial. Yet what explains comparative institutional evolution? We investigate this issue by studying the coffee exporting economies of Latin America. While homogeneous in many ways, they experienced radically different paths of economic (and political) development which is conventional traced to the differential organization of the coffee industry. We show that the different forms that the coffee economy took in the 19th century was critically determined by the legal environment determining access to land, and that different laws resulted from differences in the nature of political competition. Our analysis suggests that explanations of institutional differences that stress economic fundamentals can only be part of the story. At least in the economies we study, while geography, factor endowments and technology are clearly important, their implications for the institutional structure and thus development are conditional on the form that political competition takes in society. Endowments are not fate.

Suggested Citation

  • Robinson, James A. & Nugent, Jeffrey B, 2002. "Are Endowments Fate?," CEPR Discussion Papers 3206, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3206
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    1. Oded Galor & Omer Moav & Dietrich Vollrath, 2004. "Land Inequality and the Origin of Divergence and Overtaking in the Growth Process," GE, Growth, Math methods 0410004, University Library of Munich, Germany.
    2. Derek Byerlee & Klaus Deininger, 2013. "The Rise of Large Farms in Land-Abundant Countries: Do They Have a Future?," Palgrave Macmillan Books, in: Stein T. Holden & Keijiro Otsuka & Klaus Deininger (ed.), Land Tenure Reform in Asia and Africa, chapter 14, pages 333-353, Palgrave Macmillan.
    3. Deininger, Klaus & Mpuga, Paul, 2004. "Does greater accountability improve the quality of delivery of public services? Evidence from Uganda," Policy Research Working Paper Series 3277, The World Bank.
    4. Jonathan H. Conning, 2002. "Latifundia Economics," Department of Economics Working Papers 2001-08, Department of Economics, Williams College.
    5. Richard Grabowski, 2002. "The Relationship of State and Society: Productive or Unproductive," Journal of Developing Societies, , vol. 18(1), pages 23-45, March.
    6. Omer Javed, 2016. "Determinants of Institutional Quality: A Case Study of IMF Programme Countries," Contributions to Economics, in: The Economic Impact of International Monetary Fund Programmes, edition 1, chapter 0, pages 7-35, Springer.
    7. K. Deininger & S. Jin & H. K. Nagarajan, 2009. "Land Reforms, Poverty Reduction, and Economic Growth: Evidence from India," Journal of Development Studies, Taylor & Francis Journals, vol. 45(4), pages 496-521.
    8. Oded, Galor, 2011. "Inequality, Human Capital Formation, and the Process of Development," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 441-493, Elsevier.
    9. Deininger, Klaus & Jin, Songqing, 2006. "Tenure security and land-related investment: Evidence from Ethiopia," European Economic Review, Elsevier, vol. 50(5), pages 1245-1277, July.
    10. Deininger, Klaus & Jin, Songqing, 2009. "Securing property rights in transition: Lessons from implementation of China's rural land contracting law," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 22-38, May.
    11. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 143-179.
    12. Deininger, Klaus & Mpuga, Paul, 2005. "Does Greater Accountability Improve the Quality of Public Service Delivery? Evidence from Uganda," World Development, Elsevier, vol. 33(1), pages 171-191, January.
    13. World Bank, 2007. "India - Land Policies for Growth and Poverty Reduction," World Bank Publications - Reports 7818, The World Bank Group.
    14. Daron Acemoglu, 2006. "Modeling Inefficient Institutions," NBER Working Papers 11940, National Bureau of Economic Research, Inc.
    15. Raffaella Castagnini & Klaus Deininger & Maria A. Gonzalez, 2004. "Comparing land reform and land markets in colombia: impacts on equity and efficiency," Policy Research Working Paper Series 3258, The World Bank.
    16. World Bank, 2007. "India : Land Policies for Growth and Poverty Reduction," World Bank Publications - Books, The World Bank Group, number 15791, April.
    17. Daron Acemoglu, 2003. "The Form of Property Rights: Oligarchic vs. Democratic Societies," NBER Working Papers 10037, National Bureau of Economic Research, Inc.
    18. Kenneth L. Sokoloff & Stanley L. Engerman, 2000. "Institutions, Factor Endowments, and Paths of Development in the New World," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 217-232, Summer.
    19. Luis Vaz Silva, 2005. "Geography, European settlements and compared development in the Americas," Working Papers 200518, School of Economics, University College Dublin.
    20. Banco Mundial, 2004. "Colombia: Una Pol√Çtica De Tierras En Transici√Ìn," Documentos CEDE 2146, Universidad de los Andes, Facultad de Economía, CEDE.
    21. Oded Galor & Omer Moav & Dietrich Vollrath, 2005. "Land Inequality and the Emergence of Human Capital Promoting Institutions," Development and Comp Systems 0502018, University Library of Munich, Germany.
    22. Andrews, Abigail L., 2016. "Legacies of Inequity: How Hometown Political Participation and Land Distribution Shape Migrants’ Paths into Wage Labor," World Development, Elsevier, vol. 87(C), pages 318-332.
    23. Oded Galor & Omer Moav & Dietrich Vollrath, 2005. "The Emergence of Human Capital Promoting Institutions in the Process of Development," GE, Growth, Math methods 0508008, University Library of Munich, Germany.

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    JEL classification:

    • H00 - Public Economics - - General - - - General
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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