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Are Endowments Fate?

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  • Nugent, Jeffrey B
  • Robinson, James A

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

  • Nugent, Jeffrey B & Robinson, James A, 2002. "Are Endowments Fate?," CEPR Discussion Papers 3206, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3206
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    References listed on IDEAS

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    Cited by:

    1. Oded, Galor, 2011. "Inequality, Human Capital Formation, and the Process of Development," Handbook of the Economics of Education, Elsevier.
    2. 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, EconWPA.
    3. Deininger, Klaus & Byerlee, Derek, 2012. "The Rise of Large Farms in Land Abundant Countries: Do They Have a Future?," World Development, Elsevier, vol. 40(4), pages 701-714.
    4. 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.
    5. Jonathan Conning, 2002. "Latifundia Economics," Economics Working Paper Archive at Hunter College 02/1, Hunter College Department of Economics.
    6. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 143-179.
    7. 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.
    8. 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.
    9. Oded Galor & Omer Moav & Dietrich Vollrath, 2006. "Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions, and Great Divergence," Working Papers 2006-14, Brown University, Department of Economics.
    10. 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.
    11. World Bank, 2007. "India - Land Policies for Growth and Poverty Reduction," World Bank Other Operational Studies 7818, The World Bank.
    12. Daron Acemoglu, 2006. "Modeling Inefficient Institutions," NBER Working Papers 11940, National Bureau of Economic Research, Inc.
    13. 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.
    14. World Bank, 2007. "India : Land Policies for Growth and Poverty Reduction," World Bank Publications, The World Bank, number 15791, August.
    15. Daron Acemoglu, 2003. "The Form of Property Rights: Oligarchic vs. Democratic Societies," NBER Working Papers 10037, National Bureau of Economic Research, Inc.
    16. 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.
    17. Luis Vaz Silva, 2005. "Geography, European settlements and compared development in the Americas," Working Papers 200518, School of Economics, University College Dublin.
    18. Banco Mundial, 2004. "Colombia: Una Política De Tierras En Transición," DOCUMENTOS CEDE 002146, UNIVERSIDAD DE LOS ANDES-CEDE.
    19. 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.
    20. Oded Galor & Omer Moav & Dietrich Vollrath, 2005. "The Emergence of Human Capital Promoting Institutions in the Process of Development," GE, Growth, Math methods 0508008, EconWPA.

    More about this item

    Keywords

    development; inequality; organization; political economy;

    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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