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The Colonial Origins of Inequality: Exploring the Causes and Consequences of Land Distribution

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  • E.H.P. Frankema

    () (Groningen Growth and Development Centre, Faculty of Economics, University of Groningen)

Abstract

Recent literature has pointed out that the historical distribution of assets is crucial in explaining the observed rigidity in post-war income inequality levels. This paper explores the causes and consequences of historical land distribution employing new and existing estimates of land inequality in cross-country OLS regressions. The two central questions addressed are 1) what explains the cross-country variation in land inequality at the end of the colonial period? 2) how does initial land inequality relate to current income inequality? It is shown that land distribution is determined by (colonial) institutions responding to relative factor endowments and natural geographic conditions as the disease environment and the feasibility to grow particular food- or cash-crops. Local conditions and institutional responses differed largely from region to region. Whereas the direct relation between initial land inequality and income inequality appears to be weak, controlling for (colonial) institutional variables reveals a strong relation between initial land inequality and current (1990’s) income inequality. High levels of income inequality, specifically in Sub Saharan Africa and Latin America, are shown to have fundamentally different colonial origins.

Suggested Citation

  • E.H.P. Frankema, 2005. "The Colonial Origins of Inequality: Exploring the Causes and Consequences of Land Distribution," Ibero America Institute for Econ. Research (IAI) Discussion Papers 119, Ibero-America Institute for Economic Research.
  • Handle: RePEc:got:iaidps:119
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    References listed on IDEAS

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    Cited by:

    1. Graziella Bertocchi, 2011. "The Vanishing Bequest Tax: The Comparative Evolution Of Bequest Taxation In Historical Perspective," Economics and Politics, Wiley Blackwell, vol. 23(1), pages 107-131, March.
    2. repec:taf:jdevst:v:53:y:2017:i:12:p:2029-2049 is not listed on IDEAS
    3. Graziella Bertocchi & Chiara Strozzi, 2008. "International migration and the role of institutions," Public Choice, Springer, vol. 137(1), pages 81-102, October.
    4. repec:ilo:ilowps:462962 is not listed on IDEAS
    5. Elise Huillery, 2011. "The Impact of European Settlement within French West Africa: Did Pre-colonial Prosperous Areas Fall Behind?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 20(2), pages 263-311, March.
    6. repec:dau:papers:123456789/4316 is not listed on IDEAS
    7. Vollrath, Dietrich, 2008. "Wealth Distribution and the Provision of Public Goods: Evidence from the United States," MPRA Paper 11534, University Library of Munich, Germany.
    8. Ece Guleryuz, 2016. "Determinants of the Contemporary Inequality among MENA and African Countries: What are in the variation of Land and Natural Resource ownership?," EcoMod2016 9317, EcoMod.
    9. Pellicer, Miquel, 2009. "Inequality persistence through vertical vs. horizontal coalitions," Journal of Development Economics, Elsevier, vol. 90(2), pages 258-266, November.
    10. Bertocchi, Graziella & Strozzi, Chiara, 2006. "The Age of Mass Migration: Economic and Institutional Determinants," IZA Discussion Papers 2499, Institute for the Study of Labor (IZA).
    11. UNDP Regional Bureau for Africa & Giovanni Andrea Cornia, "undated". "Inequality Levels, Trends and Determinants in sub-Saharan Africa: An overview of main changes since the early 1990s," UNDP Africa Policy Notes 2017-03, United Nations Development Programme, Regional Bureau for Africa.
    12. Naritomi, Joana & Soares, Rodrigo R. & Assunção, Juliano J., 2012. "Institutional Development and Colonial Heritage within Brazil," The Journal of Economic History, Cambridge University Press, vol. 72(02), pages 393-422, June.
    13. Nathan Nunn, 2009. "The Importance of History for Economic Development," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 65-92, May.
    14. Caselli, Mauro, 2013. "Credit constraints, inequality and the growth gains from trade," Economics Letters, Elsevier, vol. 121(1), pages 43-47.
    15. Roe, Mark J. & Siegel, Jordan I., 2011. "Political instability: Effects on financial development, roots in the severity of economic inequality," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 279-309, September.
    16. Mauro Caselli, 2012. "Does wealth inequality reduce the gains from trade?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 333-356, June.
    17. Joana Naritomi & Rodrigo R. Soares & Juliano J. Assunção, 2007. "Rent Seeking and the Unveiling of 'De Facto' Institutions: Development and Colonial Heritage within Brazil," NBER Working Papers 13545, National Bureau of Economic Research, Inc.
    18. Miguel Laborda Pemn, 2011. ""Hombres que entre las raíces": Plantation colonies, slave rebellions and land redistribution in Saint Domingue and Cuba at the late colonial period, c. 1750 c. 1860," Documentos de Trabajo de la Sociedad Española de Historia Agraria 1102, Sociedad Española de Historia Agraria.
    19. repec:ucm:wpaper:14-09 is not listed on IDEAS
    20. Simplice Asongu, 2015. "Rational Asymmetric Development, Piketty and the Spirit of Poverty in Africa," Working Papers 15/006, African Governance and Development Institute..
    21. Ronald Fischer & Diego Huerta & Patricio Valenzuela, 2017. "The Inequality-Credit Nexus," Documentos de Trabajo 330, Centro de Economía Aplicada, Universidad de Chile.
    22. Rafael Dobado González & Hector García, 2009. "Neither so low nor so short! Wages and heights in eighteenth and early nineteenth centuries colonial Hispanic America," Working Papers del Instituto Complutense de Estudios Internacionales 0914, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.
    23. Mauro Caselli, 2012. "Does wealth inequality reduce the gains from trade?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 333-356, June.

    More about this item

    Keywords

    Colonial institutions; geography; factor endowments; land distribution; income distribution;

    JEL classification:

    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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