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Are Endowments Fate?

  • Nugent, Jeffrey B
  • Robinson, James A

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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3206.

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Date of creation: Feb 2002
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Handle: RePEc:cpr:ceprdp:3206
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  1. repec:cup:cbooks:9780521348393 is not listed on IDEAS
  2. Weingast, Barry R, 1995. "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," Journal of Law, Economics and Organization, Oxford University Press, vol. 11(1), pages 1-31, April.
  3. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
  4. Lockheed, Marlaine E & Jamison, Dean T & Lau, Lawrence J, 1980. "Farmer Education and Farm Efficiency: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 29(1), pages 37-76, October.
  5. Cornia, Giovanni Andrea, 1985. "Farm size, land yields and the agricultural production function: An analysis for fifteen developing countries," World Development, Elsevier, vol. 13(4), pages 513-534, April.
  6. Klein, Herbert S., 1992. "Bolivia: The Evolution of a Multi-Ethnic Society," OUP Catalogue, Oxford University Press, edition 2, number 9780195057355, March.
  7. Patrick Legros & Andrew F. Newman, 1992. "Wealth Effects," Discussion Papers 1024, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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