Colonial Institutions, Trade Shocks, and the Diffusion of Elementary Education in Brazil, 1889-1930

43 Pages Posted: 10 Mar 2010 Last revised: 18 Dec 2012

See all articles by Aldo Musacchio

Aldo Musacchio

Brandeis University- International Business School; National Bureau of Economic Research

Andre Martinez

Banco de México

Martina Viarengo

London School of Economics & Political Science (LSE); IZA Institute of Labor Economics; Harvard University - Harvard Kennedy School (HKS), Women and Public Policy Program

Date Written: December 18, 2012

Abstract

In this paper, we examine the role of trade shocks in promoting the diffusion of elementary education in subnational units in Brazil during a period (1889-1930) in which they had relative financial autonomy to collect export taxes and spend on public goods. The argument is that trade shocks affect asymetrically the tax revenues of state governments and, thus, their expenditures on elementary education per capita according to what crop mix they had. We then show that states with more egalitarian and democratic institutions use positive trade shocks to invest in education, while the opposite takes place in states with less democratic institutions (e.g., in states that had more slaves). We also show using OLS and instrumental variables that positive trade shocks increased expenditures on education per capita and led to higher literacy rates and to more schools per children. The resulting distribution of human capital across states persists until today.

Suggested Citation

Musacchio, Aldo and Martinez Fritscher, Andre C. and Viarengo, Martina, Colonial Institutions, Trade Shocks, and the Diffusion of Elementary Education in Brazil, 1889-1930 (December 18, 2012). Harvard Business School BGIE Unit Working Paper No. 10-075. Available at SSRN: https://ssrn.com/abstract=1566887 or http://dx.doi.org/10.2139/ssrn.1566887

Aldo Musacchio (Contact Author)

Brandeis University- International Business School ( email )

415 South Street MC 32
Waltham, MA 02454-9110
United States

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://www.nber.org/people/aldo_musacchio

Andre C. Martinez Fritscher

Banco de México ( email )

Av. 5 de Mayo 18
Piso 4
Mexico City, 06059
Mexico

Martina Viarengo

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Harvard University - Harvard Kennedy School (HKS), Women and Public Policy Program ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-496-4786 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
118
Abstract Views
1,523
rank
232,919
PlumX Metrics