Constructive Extraction? - Encomienda, the Colonial State, and Development in Colombia

About this event

The Spanish encomienda, a colonial forced-labor institution that lasted three centuries, killed many indigenous people and caused others to flee into nomadism. And yet we show that Colombian municipalities with encomiendas in 1560 enjoy better outcomes today across multiple dimensions of development compared to those without: higher municipal GDP per capita, tax receipts, and secondary school enrolments; lower infant mortality and unsatisfied basic needs; larger, denser populations; and superior fiscal performance and tax collection efficiency. Why? A mediation exercise using data on local institutions in 1794 shows that encomiendas affected development overwhelmingly by helping build the local state. Where they dominated, encomenderos founded local institutions early; other places remained stateless for centuries. These institutions mobilized public investment in ways that doubtless suited encomenderos, but over time spurred greater economic and human development.