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Institutional Development and Colonial Heritage within Brazil | CFSP | Consortium on Financial Systems and Poverty

Institutional Development and Colonial Heritage within Brazil

Juliano Assunção
Joana Naritomi
Rodrigo Soares
Publication Type: 
Working Papers
Journal Name: 
IZA Discussion Paper No. 4276
Publication Year: 
2009

This paper analyzes the determinants of local institutions and distribution of political power within a constant 'macro-institutional' setting. We show that characteristics of Brazilian municipalities related to institutional quality and distribution of political power are partly inherited from the colonial histories experienced by different areas of the country. Municipalities with origins tracing back to the sugar-cane colonial cycle – characterized by a polarized and oligarchic socioeconomic structure – display today more inequality in the distribution of endowments (land). Municipalities with origins tracing back to the gold colonial cycle – characterized by a heavily inefficient presence of the Portuguese state – display today worse governance practices and less access to justice. The colonial rent-seeking episodes are also correlated with lower provision of public goods and lower income per capita.

JEL Codes: 
N26, O17, O40
Region: 
Latin America/Caribbean
Country: 
Brazil
Topic: 
Economic History
Topic: 
Income and Wealth