ARTICLES

Institutional Development and Colonial Heritage within Brazil

JOANA NARITOMI^a1, RODRIGO R. SOARES^a2 and JULIANO J. ASSUNÇÃO^a3

^a1 Ph.D. Candidate in Political Economy and Government, Department of Economics, Harvard University, Littauer Center, 1805 Cambridge Street, Cambridge, MA 02138. E-mail: naritomi@fas.harvard.edu.

^a2 Associate Professor, Pontifical Catholic University of Rio de Janeiro, Department of Economics, Rua Marquês de São Vicente 225, Rio de Janeiro, RJ 22451-900, Brazil. E-mail: soares@econ.puc-rio.br.

^a3 Assistant Professor, Pontifical Catholic University of Rio de Janeiro, Department of Economics, Rua Marquês de São Vicente 225, Rio de Janeiro, RJ 22451-900, Brazil. E-mail: juliano@econ.puc-rio.br.

Abstract

This article analyzes the determinants of local institutions in Brazil. We show that institutional quality and distribution of land are partly inherited from the colonial histories experienced by different areas of the country. The sugar cane boom—characterized by an oligarchic society—is associated with more land inequality. The gold boom—characterized by a heavily inefficient presence of the Portuguese state—is associated with worse governance and access to justice. We do not find similar effects for a postcolonial boom (coffee). We also find that the colonial episodes are correlated with lower provision of public goods.

Footnotes

Earlier versions of this article circulated under the title, “Rent Seeking and the Unveiling of ‘De Facto' Institutions: Development and Colonial Heritage within Brazil.” The authors gratefully thank Flávia Chein Feres for essential help in managing and sharing the basic geo-referenced data set on Brazilian municipalities, Cláudio Egler for providing the geo-referenced data on the coastline and the projection of the Brazilian map in kilometers, Jesus Fernando Mansilla Baca for providing the data on temperatures and types of soil. The article also benefited from comments and suggestions from the editor Price Fishback, two anonymous referees, Marcelo de Paiva Abreu, Daron Acemoglu, Roger Betancourt, Filipe Campante, Alberto Diaz-Cayeros, Cláudio Ferraz, Karla Hoff, Peter Murrell, Edson Severnini, Dietrich Vollrath, and seminar participants at Columbia University, EESP-FGV, Ibmec-Rio, IMF, IPEA-Rio, Johns Hopkins University/Center for Global Development, MIT Political Economy Breakfast, PUC-Rio, Universidade de Brasília, University of California, Berkeley, University of California, Los Angeles, University of Delaware, University of Houston, University of Maryland, College Park, University of Pittsburgh, World Bank, the 2007 Panel of the LACEA Political Economy Group (Cartagena), the 2007 NBER Summer Institute on Income Distribution and Macroeconomics (Cambridge), the 2007 LACEA Annual Meeting (Bogotá), and the 2008 ACES Panel at the AEA Meetings (New Orleans). Financial support from CNPq and FINEP is gratefully acknowledged. The usual disclaimer applies.