Economic and Political Inequality in Development: The Case of Cundinamarca, Colombia

63 Pages Posted: 4 Sep 2007

See all articles by Daron Acemoglu

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

M B

affiliation not provided to SSRN

Pablo Querubin

New York University (NYU) - Department of Politics

James A. Robinson

Harvard University - Department of Government; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: August 28, 2007

Abstract

Is inequality harmful for economic growth? Is the underdevelopment of Latin America related to its unequal distribution of wealth? A recently emerging consensus claims not only that economic inequality has detrimental effects on economic growth in general, but also that differences in economic inequality across the American continent during the 19th century are responsible for the radically different economic performances of the north and south of the continent. In this paper we investigate this hypothesis using unique 19th century micro data on land ownership and political office holding in the state of Cundinamarca, Colombia. Our results shed considerable doubt on this consensus. Even though Cundinamarca is indeed more unequal than the Northern United States at the time, within Cundinamarca municipalities that were more unequal in the 19th century (as measured by the land gini) are more developed today. Instead, we argue that political rather than economic inequality might be more important in understanding long-run development paths and document that municipalities with greater political inequality, as measured by political concentration, are less developed today. We also show that during this critical period the politically powerful were able to amass greater wealth, which is consistent with one of the channels through which political inequality might affect economic allocations. Overall our findings shed doubt on the conventional wisdom and suggest that research on long-run comparative development should investigate the implications of political inequality as well as those of economic inequality.

Suggested Citation

Acemoglu, Daron and B, M and Querubin, Pablo and Robinson, James A., Economic and Political Inequality in Development: The Case of Cundinamarca, Colombia (August 28, 2007). MIT Department of Economics Working Paper No. 07-22, Available at SSRN: https://ssrn.com/abstract=1011067 or http://dx.doi.org/10.2139/ssrn.1011067

Daron Acemoglu (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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M B

affiliation not provided to SSRN

Pablo Querubin

New York University (NYU) - Department of Politics ( email )

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United States

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James A. Robinson

Harvard University - Department of Government ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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