Good, Bad, and Ugly Colonial Activities : Studying Development Across the Americas

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World Bank, Washington, DC

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Levels of economic development vary widely within countries in the Americas. This paper argues that part of this variation has its roots in the colonial era. Colonizers engaged in different economic activities in different regions of a country, depending on local conditions. Some activities were "bad" in the sense that they depended heavily on the exploitation of labor and created extractive institutions, while "good" activities created inclusive institutions. The authors show that areas with bad colonial activities have lower gross domestic product per capita today than areas with good colonial activities. Areas with high pre-colonial population density also do worse today. In particular, the positive effect of "good" activities goes away in areas with high pre-colonial population density. The analysis attributes this to the "ugly" fact that colonizers used the pre-colonial population as an exploitable resource. The intermediating factor between history and current development appears to be institutional differences across regions and not income inequality or the current ethnic composition of the population.

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ACCESS TO EDUCATION, AGE DISTRIBUTION, AGRICULTURE, BENCHMARKS, CALCULATIONS, CASH CROPS, CENSUS, CENTRAL AMERICA, CENTRAL AMERICAN, CENTRAL BANK, CHECKS, CIVIL RIGHTS, COMMODITIES, CONTACT POPULATION, CONTRIBUTION, DECENTRALIZATION, DISCRIMINATION, DUAL ECONOMY, ECONOMIC ACTIVITIES, ECONOMIC ACTIVITY, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC HISTORY, ECONOMIC OUTCOMES, ECONOMIC PERFORMANCE, ECONOMIC POWER, ECONOMIES OF SCALE, EDUCATIONAL ATTAINMENT, EQUAL ACCESS, ETHNIC GROUPS, FUTURE RESEARCH, GDP, GDP PER CAPITA, GOVERNMENT POLICIES, GROSS DOMESTIC PRODUCT, GROSS DOMESTIC PRODUCT PER CAPITA, HOUSEHOLD INCOME, HOUSEHOLD SURVEYS, HUMAN CAPITAL, HUMAN DEVELOPMENT, IMMIGRATION, IMPACT OF POPULATION, INCOME INEQUALITY, INDUSTRIAL DEVELOPMENT, LABOR FORCE, LABOR SUPPLY, LAND TENURE, LEVEL OF DEVELOPMENT, MALARIA, MORTALITY, NATIONAL LEVEL, NATIONAL POLICIES, NATIVE POPULATION, NATURAL ENVIRONMENT, NATURAL RESOURCES, ORGANIZATIONAL FORM, POLICY RESEARCH, POLICY RESEARCH WORKING PAPER, POLITICAL POWER, POPULATION DENSITY, POPULATION ESTIMATES, POVERTY RATE, POVERTY RATES, PROBABILITY, PRODUCTION FUNCTION, PROGRESS, PROPERTY OWNERSHIP, PROPERTY RIGHTS, PUBLIC GOODS, RESEARCH ASSISTANCE, RESPECT, SOCIAL INSTITUTIONS, SOCIAL SCIENCES, SOCIETAL NORMS, SOURCE OF INFORMATION, TRANSPORTATION, TRAUMA, UNEMPLOYMENT, UNIONS, VALUABLE, WEALTH

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