Constructive Extraction? Encomienda, the Colonial State, and Development in Colombia

63 Pages Posted: 16 May 2022

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: May 12, 2022

Abstract

The Spanish encomienda, a colonial forced-labor institution that lasted three centuries, killed many indigenous people and caused others to flee into nomadism. And yet we show that Colombian municipalities with encomiendas in 1560 enjoy better outcomes today across multiple dimensions of development compared to those without: higher municipal GDP per capita, tax receipts, and secondary school enrolments; lower infant mortality and unsatisfied basic needs; larger populations; and superior fiscal performance and tax collection efficiency. Why? A mediation exercise using data on local institutions in 1794 shows that encomiendas affected development overwhelmingly by helping build the local state. Detailed historical evidence shows when and how encomenderos founded local institutions early on in places where they settled. Places lacking encomiendas also lacked local states for up to 300 years. These institutions mobilized public investment in ways that doubtless suited encomenderos, but over time spurred greater economic and human development.

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, Constructive Extraction? Encomienda, the Colonial State, and Development in Colombia (May 12, 2022). Documento CEDE No. 12, Available at SSRN: https://ssrn.com/abstract=4109434 or http://dx.doi.org/10.2139/ssrn.4109434

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 )

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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