The Colonial Origins of Inequality: Exploring the Causes and Consequences of Land Distribution

Recent literature has pointed out that the historical distribution of assets is crucial in explaining the observed rigidity in post-war income inequality levels. This paper explores the causes and consequences of historical land distribution employing new and existing estimates of land inequality in cross-country OLS regressions. The two central questions addressed are 1) what explains the cross-country variation in land inequality at the end of the colonial period? 2) how does initial land inequality relate to current income inequality? It is shown that land distribution is determined by (colonial) institutions responding to relative factor endowments and natural geographic conditions as the disease environment and the feasibility to grow particular food- or cash-crops. Local conditions and institutional responses differed largely from region to region. Whereas the direct relation between initial land inequality and income inequality appears to be weak, controlling for (colonial) institutional variables reveals a strong relation between initial land inequality and current (1990’s) income inequality. High levels of income inequality, specifically in Sub Saharan Africa and Latin America, are shown to have fundamentally different colonial origins.Colonial institutions, geography, factor endowments, land distribution, income distribution

Reconstructing labor income shares in Argentina, Brazil and Mexico, 1870-2000

Special Issue on Latin American Inequality.The labor income share in national income is a good indicator of the extent to which the working classes are able to reap the fruits of economic growth or, conversely, bear the burden of economic stagnation. This paper aims to reconstruct the labor income share of Argentina, Brazil and Mexico in a three-sector framework, including the rural, the urban formal and the urban informal sectors. We find that in all three countries the share of labor earnings peaked in the middle of the 20th century. Fluctuations in the Brazilian and Mexican labor income shares were large, with a sharp decline in the post-1961 and post-1976 periods, respectively. In Argentina, the labor income shares tended to be more constant at levels around 50 per cent, testifying to a more stable and egalitarian distribution of income.La cuota del ingreso del trabajo en la renta nacional es un buen indicador sobre el grado en el que las clases trabajadoras han sido capaces de beneficiarse de los frutos del crecimiento económico o, al contrario, sufrir la carga del estancamiento. Este artículo tiene como objetivo reconstruir la cuota del ingreso del trabajo en Argentina, Brasil y México en un contexto de tres sectores, incluyendo el rural, el formal urbano y el informal urbano. Se aprecia que en los tres países la cuota del ingreso del trabajo llega a su máximo hacia mitad del siglo XX. Las fluctuaciones de este ingreso en el caso de Brasil y México fueron muy amplias, con un declive muy agudo en el periodo posterior a 1961 y 1971 respectivamente. En Argentina estas cuotas del ingreso del trabajo tendieron a ser más constantes y mantuvieron niveles cercanos al 50 por ciento, demostrando una distribución de la renta más estable e igualitaria.Financial support from the Dutch Science Foundation (NWO) and the European Science Foundation (Global Euronet)

Comparing the distribution of education across the developing world, 1960-2005:What does the grade enrollment distribution tell about Latin America?

The present paper introduces a new indicator of educational inequality, the grade distribution ratio (GDR), focusing on levels of grade repetition and drop out rates in primary and secondary education. The indicator is specifically suitable to evaluate the distributive implications of expanding educational systems in developing countries. A comparative analysis of grade enrollment distributions across 92 developing countries from 1960 to 2005 reveals that the decline in educational inequality has been substantial and wide spread since 1960, but that progress has slowed down in the last two decades. Latin American countries were characterized by very large initial levels of educational inequality, but contrary to other developing regions continued to equalize their grade enrollment distribution in the last two decades

The historical evolution of inequality in Latin America:a comparative analysis, 1870-2000

Current levels of income and asset inequality in Latin American countries are, from a global comparative perspective, extraordinary high. This thesis explores the roots of Latin American economic inequality in the colonial era and, subsequently, focuses on the developments in the period 1870-2000. During the so-called ‘long twentieth century’ the forces of economic modernisation reformed the composition of national income fundamentally. Industrialisation, urbanisation, an increasing pace of technological change and vigorous waves of globalisation and de-globalisation heralded the definitive decay of the rural pre-modern ‘colonial’ society. The crucial question is why Latin American countries nevertheless failed, in spite of these forces, to settle that longstanding account of the colonial past

Was It Really “Growth with Equity” under Soeharto? A Theil Analysis of Indonesian Income Inequality, 1961-2002

For over three decades (1966-1998) socio-economic policies in Indonesia were founded on Soeharto’s development trilogy “growth, stability and equity”. Literature agrees that the policy goals of growth and stability were met by and large, but remains inconclusive about equity. In this paper we estimate Theil indices of sector income distribution to evaluate the impact of structural change on the trend of Indonesian income inequality for the period 1961-2002. Where conventional Gini-coefficients based on household expenditure surveys suggest that Indonesian income equality is comparatively confined and reveals no long run tendency in either upward or downward direction, our results indicate that inter and intra-sector income inequality increased rapidly under Soeharto, as well as the share of the labour force engaged in informal sector activities