Center for Global Development and The Paul H Nitze School of Advanced International Studies co-hosted this Massachusetts Avenue Development Seminar (MADS)* on Rent Seeking and the Unveiling of “De Facto” Institutions: Development and Colonial Heritage within Brazil featuring Rodrigo Soares, Assistant Professor, Department of Economics, University of Maryland. Karla Hoff, Senior Research Economist, Development Economics Group, World Bank, served as the discussant.
Paper abstract: This paper analyzes the roots and implications of de facto institutions, within a constant de jure institutional setting. We explore the role of rent-seeking episodes in colonial Brazil as determinants of the quality of current local institutions. We show that municipalities with origins tracing back to the sugar-cane colonial cycle--characterized by a polarized and oligarchic socioeconomic structure--display today more inequality in the distribution of land and more political concentration in local legislatures. Municipalities that had their origins connected to the gold colonial cycle--characterized by an over-bureaucratic and heavily intervening presence of the Portuguese state--display today worse governance practices and less access to justice. Using variables created from the rent-seeking colonial episodes as instruments to current institutions, we show that local governance and access to justice are significantly related to long-term development across Brazilian municipalities.
*The Massachusetts Avenue Development Seminar (MADS) series is an effort by the Center for Global Development and The Paul H Nitze School of Advanced International Studies to take advantage of the incredible concentration of great international development scholars in the Metro Washington, DC area. The series seeks to bring together members of this community and improve communication between them.
