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Settlers, Slaves, and Merchants

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Recent research on economic history and economic development has pointed out that the roots of economic development in countries outside Europe, especially America and Africa, may lay in the different “styles” of colonization. The simplest explanation is that of geographical determinism, as in Jared Diamond’s Guns, Germs and Steel (1997). A more refined view is that geography mattered, but only indirectly through institutions, as in “The Colonial Origins of Comparative Development: An Empirical Investigation” (2001) by Daron Acemoglu, Simon Johnson, and James Robinson (henceforth AJR). This view has been applied to explain the divergence between North and South America (Kenneth Sokoloff and Stanley Engerman, “Institutions, factor endowments and paths of development,” 2000, henceforth SE).

In the current debate on the relationship between geography, institutions and economic growth, much has been done using data from the British Empire, but not much using the Spanish Empire sources. Unlike the British sources, the Spanish sources contain information regarding the human capital of the migrant, such as occupation. In this project, we intend to fill this gap in the literature by looking extensively at the Spanish sources and to test the different implications of the standing theories.

Hypotheses to be tested

According to AJR, migrants traveled to the places with the lowest mortality rates, i.e., North America. SE, however, shows that this was not the case for the British Empire in the American continent: most migrants traveled to the Caribbean, even though they have higher mortality rates. In the literature, there is no evidence on whether this difference was true for the Spanish Empire as well.

According to SE, fewer Europeans migrated to the Spanish than to the British Empire, but there are many explanations for this fact. It could be that there was plenty of unskilled labor in the Spanish Empire, and there was no “demand” for more workers. This would imply that most of the migrants to the Spanish Empire would be skilled workers, that would “complement” the local unskilled workers. In the SE story, the migration preferred by the Spanish American elites would be unskilled workers which are “complementary” to the elites. Without knowing the occupational composition of the migrants, we cannot test the SE hypothesis.

According to AJR, and reconciling their results with the SE finding for British America, it could be still true that most migrants went to the Caribbean in the Spanish Empire, but that most “skilled” migrants went to North America or to places with low mortality. If this was the case, then a refinement of their hypothesis would be verified. That is, that what matters for economic development (and the creation of good institutions) is the flow of “skilled” migrants, and that those migrants did go to places with lower mortality rates.

With Leticia Arroyo Abad, we received a National Science Foundation grant to study migrant networks and the role of human capital and institutions in long term development in the Americas.

We have a dedicated webpage for this project. Check out “Settlers, Slaves, and Merchants”

We are organizing a conference next fall about the role on human capital in long-term development in the Americas. Check out the call for papers here.


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