Is Extraction Bad? Encomienda and Development in Colombia Since 1560

57 Pages Posted: 26 Jul 2017

See all articles by Jean-Paul Faguet

Jean-Paul Faguet

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

Camilo Matajira

Independent

Fabio Sánchez

Universidad de los Andes, Colombia - Department of Economics

Date Written: July 11, 2017

Abstract

We explore the impact of encomienda, a forced-labor institution imposed by the Spanish throughout Latin America during three centuries, on long-term development outcomes in Colombia. Despite being a classically extractive institution, municipalities that had encomiendas in 1560 have higher development indicators than otherwise-similar, neighboring municipalities without. Encomienda is associated with higher municipal GDP/capita, lower poverty and infant mortality, and higher secondary school enrolments today. Further probing implies a mechanism by which encomenderos founded the local state in the colonial territories they dominated. This stronger local state persisted through Colombia’s war of independence and the chronic instability of the early republic. It mobilized resources and invested in public goods in ways that initially suited encomenderos, but over long periods of time also spurred economic and human development. Our results highlight the benefits of disaggregating “institutions” to analytically discrete components, and of pushing analysis to the subnational level.

Keywords: Encomienda, forced labor, state capacity, extraction, colonialism, development, Colombia

JEL Classification: H7, N36, N96, O1, O43

Suggested Citation

Faguet, Jean-Paul and Matajira, Camilo and Sánchez Torres, Fabio, Is Extraction Bad? Encomienda and Development in Colombia Since 1560 (July 11, 2017). Documento CEDE No. 2017-48. Available at SSRN: https://ssrn.com/abstract=3007769 or http://dx.doi.org/10.2139/ssrn.3007769

Jean-Paul Faguet (Contact Author)

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 207 955 6435 (Phone)
+44 207 955 6844 (Fax)

HOME PAGE: http://www.lse.ac.uk/Depts/destin/faguetjp.html

Camilo Matajira

Independent ( email )

No Address Available

Fabio Sánchez Torres

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia
+57 1 332 4495 (Phone)
+57 1 332 4492 (Fax)

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