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Long-Term Effects of a Commodity Boom: Rubber Slavery in the Amazon

Author

Listed:
  • Araujo, Daniel
  • Laudares, Humberto
  • Murillo, Dafne
  • Paredes, Hector
  • Valencia Caicedo, Felipe

Abstract

Can a brief period of economic prosperity leave a legacy of long-term adversity for local populations? This study investigates the enduring impact of the Amazon rubber boom around 1900 on contemporary income, inequality, Indigenous groups presence, and forest conservation. Identification exploits variation in historical rubber suitability across municipalities and discontinuities around rubber concession boundaries. Municipalities with larger shares of rubber-suitable land experienced an initial economic surge, as evidenced by higher per capita GDP in the 1920 Census, but this prosperity was not sustained by 2010. Increased ethnic mixing, already visible in the 1872 Census, indicates that earlier economic expansion intensified contact with Indigenous groups. In the long run, rubber-suitable areas show lower population density, higher extinction of Indigenous groups, and greater income inequality. Consistent with the disproportionate violence and labor coercion inflicted on Indigenous groups, our Regression Discontinuity analysis further documents long-lasting environmental effects, with higher rates of deforestation, coca cultivation, and cattle raising in former rubber concession areas. Together, the results suggest that while the rubber boom generated short-term wealth, it left a legacy of persistent underdevelopment, social transformation, and environmental degradation.

Suggested Citation

  • Araujo, Daniel & Laudares, Humberto & Murillo, Dafne & Paredes, Hector & Valencia Caicedo, Felipe, 2025. "Long-Term Effects of a Commodity Boom: Rubber Slavery in the Amazon," IDB Publications (Working Papers) 14374, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:14374
    DOI: http://dx.doi.org/10.18235/0013815
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    JEL classification:

    • N36 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Latin America; Caribbean
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • N56 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Latin America; Caribbean
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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