Colonialism Inequality and Long-Run Paths of Development

Colonialism Inequality and Long-Run Paths of Development -...

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Unformatted text preview: NBER WORKING PAPER SERIES COLONIALISM, INEQUALITY, AND LONG-RUN PATHS OF DEVELOPMENT Stanley L. Engerman Kenneth L. Sokoloff Working Paper 11057 http://www.nber.org/papers/w11057 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 January 2005 The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. 2005 by Stanley L. Engerman and Kenneth L. Sokoloff. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including notice, is given to the source. Colonialism, Inequality, and Long-Run Paths of Development Stanley L. Engerman and Kenneth L. Sokoloff NBER Working Paper No. 11057 January 2005 JEL No. N10 ABSTRACT Over the last few years, colonialism, especially as pursued by Europeans, has enjoyed a revival in interest among both scholars and the general public. Although a number of new accounts cast colonial empires in a more favorable light than has generally been customary, others contend that colonial powers often leveraged their imbalance in power to impose institutional arrangements on the colonies that were adverse to long-term development. We argue here, however, that one of the most fundamental impacts of European colonization may have been in altering the composition of the populations in the areas colonized. The efforts of the Europeans often involved implanting ongoing communities who were greatly advantaged over natives in terms of human capital and legal status. Because the paths of institutional development were sensitive to the incidence of extreme inequality which resulted, their activity had long lingering effects. More study is needed to identify all of the mechanisms at work, but the evidence from the colonies in the Americas suggests that it was those that began with extreme inequality and population heterogeneity that came to exhibit persistence over time in evolving institutions that restricted access to economic opportunities and generated lower rates of public investment in schools and other infrastructure considered conducive to growth. These patterns may help to explain why a great many societies with legacies as colonies with extreme inequality have suffered from poor development experiences. Stanley L. Engerman Department of Economics University of Rochester Rochester, NY 14627 and NBER enge@troi.cc.rochester.edu Kenneth L. Sokoloff Department of Economics University of California, Los Angeles Los Angeles, CA 90095-1477 and NBER sokoloff@ucla.edu The study, if not the practice, of colonialism is again in fashion. Over the last few years, the institution, especially as pursued by Europeans, has enjoyed a revival in interest among both scholars and the general public. One reason for this reexamination may be sentimentality for a simpler ordered world, as a number of these new accounts cast colonial empires in a more favorable light than has...
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Colonialism Inequality and Long-Run Paths of Development -...

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