What is the impact of early settlers on the long-term development of Latin American Spanish colonies? What is the role of their heterogeneous skills? Have early settlers’ characteristics persisted over time?
The authors explore the initial phase of the Spanish colonization of Latin America that occurred between 1492 and 1540 to study early settlers’ legacy effects on human capital and economic development. They benefit from a natural experiment within a territory that just had a single colonizer. Moreover, Spanish settlers were randomly distributed from Northern Mexico to Argentina since the land had not been previously explored.
Archived administrative data allowed to collect information with regards to the first 20,000 settlers who travelled from the port of Seville, that was the only departure point at the time. Not only their names, but also villages of origin, specific destination in South America, and occupations were considered for the analysis. In fact, they had distinct backgrounds ranging from high-skilled, such as bankers and doctors, to low-skilled settlers, namely peasants and servants.
This paper has an intrinsic historic dimension as it turns to the roots of the Spanish colonization to provide evidence on settlers’ importance for the development of former colonies. It demonstrates that the great level of skills heterogeneity among early settlers has played an important role for the economic development that is nowadays patent across Latin America. Regions colonized by highly qualified settlers are more developed and this path is evident with respects to agriculture transformation and infrastructures, but also to entrepreneurship and market orientation.
Marta Reynal-Querol is an ICREA Research Professor at the Department of Economics and Business at Universat Pompeu Fabra and the Director of the Institute of Political Economy and Governance. She is also the Director of the BSE MSc in Economics and Research Fellow of the Center for Economic Policy Research (CEPR). She holds a PhD in Economics from London School of Business and Economics and a MSc in Honors from the Universat Pompeu Fabra. Her research interests are focused on conflict resolution, causes of civil wars, institutions, and aid effectiveness. Know more about her work here.
Written by Tiago Martins, student of the MSc in Economics at Nova SBE and member of the NOVAFRICA Students Group.