Titles for me but not for thee: transitional gains trap of property rights extension in Colombia

PERRY FERRELL

PUBLIC CHOICE

Abstract: I apply Tullock’s transitional gains trap to the formalization of property titles in Latin America to understand public choice problems in mending institutions. In an area where land is owned by formal and informal institutions, policies to extend property rights will not be supported by voters holding legal title because it will devalue their property. To test this I use data from Colombia where a peace deal to end a 50-year conflict with Revolutionary Armed Forces of Colombia rebels was reached in 2016 and put to a public referendum. The deal included formalization of property titles across the nation as well as an end to the conflict. Using municipal-level data on voting and property ownership and controlling for conflict history, I find potential losses to formal property holders pushed median voter preferences toward dissension. A 1% increase in legally titled land increases dissenting vote share by 3% points. These results are relevant to institutional reforms anywhere with corrupted property rights.

Resource rents and populism in resource-dependent economies

ELENA SEGHEZZA, GIOVANNI B. PITTALUGA

EUROPEAN JOURNAL OF POLITICAL ECONOMY

Abstract: A usual explanation for populism is the existence of bad institutions, with an autocratic regime dispelling opposition by distributing income to the ‘masses’ in the manner of the ‘bread and circuses’ of Imperial Rome. In Bolivia, Ecuador, and Venezuela, populist redistribution occurred in conjunction with weakening of institutions. We associate populist redistribution with resource rents available in the course of the commodity price cycle. When production is predominantly natural resources, other industry interests are ineffective in opposing populist redistribution and preventing the undermining of democracy. Rather than associating populism with preexisting bad institutions as others have done, we show empirically that, in the cases we study, resource rents facilitated populism that allowed authoritarian institutions to be created.

A city of trades: Spanish and Italian immigrants in late-nineteenth-century Buenos Aires, Argentina

LETICIA ARROYO ABAD, BLANCA SÁNCHEZ-ALONSO

CLIOMETRICA

Abstract: The city of Buenos Aires in the 1890s is an extreme case in immigration history since the native workers accounted for less than one-third of the labour force. In this paper, we look at the labour market performance of Argentineans vis-à-vis the largest two immigrant groups, Italians and the Spaniards. We find that, on average, Argentineans enjoyed higher wages, but workers specialised in particular occupations by nationality. Immigrants clustered in occupations with lower salaries. Despite higher literacy levels and the language advantage, Spaniards did not outperform Italians in earnings. Ethnic networks facilitated the integration of immigrants into the host society and played a role in the occupation selection of immigrants. Our results suggest that Italian prosperity in Buenos Aires was not based on superior earnings or skills but on older and powerful networks.

The Economics Impact of Sovereign Defaults in Latin America 1870-2012

TJEERD MENNO BOONMAN

REVISTA DE HISTORIA ECONOMICA, Volume 35, Issue 1

Abstract: This article analyzes sovereign debt defaults in four Latin American countries—Argentina, Brazil, Chile and Mexico—for the period 1870-2012. The impact of sovereign defaults on real GDP growth is generally short-lived, while the impact in terms of output losses is deep and lasts long. Defaults in the period 1972-2012 show a deep and long-lasting impact compared to defaults in earlier periods. Moreover, the length of the contraction that follows a default is associated with favourable international conditions in the run-up to a default, while the depth of the contraction is associated with an expansive domestic economy in the run-up to a default. The results fit with boom–bust theories and sudden stop models.

The rise and fall of income inequality in Chile

FRANCISCO PARRO & LORETO REYES

LATIN AMERICAN ECONOMIC REVIEW

Abstract: This paper presents evidence on a rise and fall in income inequality in Chile during the past two decades. We show that income inequality rises from 1990 to 2000 and then falls from 2000 to 2011. We perform simple but informative decompositions to figure out the contributing factors behind that dissimilarity in the behavior of inequality across those two subperiods. Our results are consistent with a story in which economic growth increases the demand for more educated workers, initially increasing inequality. However, those higher returns to education encourage agents to invest in higher education, producing a subsequent human capital deepening that reduces inequality at later stages of the development process.

Vinculaciones Políticas en un Régimen de Banca Libre: El Caso de la Crisis Bancaria de 1878 en Chile

IGNACIO BRIONES

REVISTA DE HISTORIA ECONOMICA, Volume 34, Issue 3

Abstract: In 1878 Chile experienced a banking crisis which brought an end to the Chilean free-banking period based on convertibility initiated in 1860. Using monthly bank balance sheets and other primary sources, I analyze the period and argue that one important explanation for the crisis was the growing relationship between banks and government through state loans to finance fiscal deficits and privileges to the issuing banks. I claim that the crisis emerged from a large bank loan in late 1877 which induced over-issuance and depreciation expectations leading, logically, to a bank run. The Chilean case provides valuable evidence of an element frequently neglected by the free-banking literature: the links between banks and government.

 

 

Cartas Españolas de Jean-Baptiste Say: Evidencias Para el Estudio de la Circulación de Ideas Económicas

JOSÉ M. MENUDO

Journal of Iberian and Latin American Economic History, Volume 34, Issue 2

Abstract: Este trabajo transcribe cinco cartas inéditas dirigidas a Jean-Baptiste Say por Manuel María Gutiérrez, Álvaro Flórez Estrada y el Marqués de Valle Santoro, respectivamente. Esta correspondencia acredita la proximidad de los autores españoles a las obras canónicas de la Economía clásica. Destacamos algunas evidencias de interés para el estudio de la transmisión de las ideas económicas. En primer lugar, la traducción de la obra de Say es un proyecto colectivo, estructurado en torno a la Real Sociedad Económica de Amigos del País de Madrid. Describimos también la tarea de expurga de los pasajes condenables para poder publicar en castellano el Traité d`économie politique, concretamente aquellos relativos al papel de la religión en el desarrollo económico y en la educación pública.