Rent Seeking and the Unveiling of &Apos;De Facto&Apos; Institutions: Development and Colonial Heritage within Brazil

59 Pages Posted: 31 Oct 2007 Last revised: 4 Jan 2021

See all articles by Joana Naritomi

Joana Naritomi

World Bank; Harvard University

Rodrigo R. Soares

Columbia University - School of International & Public Affairs (SIPA); Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics; IZA Institute of Labor Economics

Juliano J. Assunção

Pontifical Catholic University of Rio de Janeiro (PUC-Rio) - Department of Economics

Date Written: October 2007

Abstract

This paper analyzes the roots of variation in 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, and argue that this variation reveals a de facto dimension of institutional quality. 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. Municipalities with origins tracing back 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. The colonial rent-seeking episodes are also correlated with lower provision of public goods and lower income per capita today, and the latter correlation seems to work partly through worse institutional quality at the local level.

Suggested Citation

Naritomi, Joana and Soares, Rodrigo R. and Assunção, Juliano J., Rent Seeking and the Unveiling of &Apos;De Facto&Apos; Institutions: Development and Colonial Heritage within Brazil (October 2007). NBER Working Paper No. w13545, Available at SSRN: https://ssrn.com/abstract=1024962

Joana Naritomi

World Bank ( email )

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Harvard University

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Rodrigo R. Soares (Contact Author)

Columbia University - School of International & Public Affairs (SIPA) ( email )

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Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

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IZA Institute of Labor Economics

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Juliano J. Assunção

Pontifical Catholic University of Rio de Janeiro (PUC-Rio) - Department of Economics ( email )

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Rio de Janeiro, RJ 22453
Brazil

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