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2017 | OriginalPaper | Chapter

5. Sensitivity to Alternative Theories

Authors : Daniel Oto-Peralías, Diego Romero-Ávila

Published in: Colonial Theories of Institutional Development

Publisher: Springer International Publishing

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Abstract

This chapter exhaustively controls for all possible factors framed within alternative theories that can explain postcolonial institutional development, which may be relevant omitted variables for the baseline interaction model. These factors comprise (1) distance to the metropolis of Western colonial powers to account for differences in transportation costs from the metropolis to the colonies, (2) geographic costs of control of colonial dominions, (3) time variation in the colonial strategies of different colonial powers within the two main waves of colonization, (4) religion, (5) ethnolinguistic fractionalization and the existence of several precolonial native cultures, (6) the possibility that precolonial political centralization affected the strategies of colonizers beyond its effect on the accountability of local chiefs, and (7) climate and other geographical factors. The evidence indicates that the alternative explanation associated with the timing and duration of colonialism fails to overturn our results regarding the sharp contrast across colonial powers in the effect of endowments on current institutions. Concerning the inclusion of sociological and anthropological factors, current institutional levels are driven by the institutional arrangements imposed externally by the colonizers in the colonies (which in turn differed on the basis of the initial level of endowments) rather than by the degree of precolonial centralization or ethnic homogeneity encountered by European colonial powers upon their arrival. In addition, our results do not appear to be simply caused by a correlation between institutions and colonies concentrated in areas with certain geographic or climatic features.

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previous chapter Empirical Methodology and Baseline Regression Results
next chapter Further Sensitivity Analyses
Footnotes
1
La Porta et al. (1999) relate ethnic fractionalization to the State’s predisposition toward greater redistribution. It is assumed that in heterogeneous societies, groups in power are more likely to privilege themselves and exclude the other ethnic groups.
 
2
They used anthropological data from Murdock (1967), who assigned a number of jurisdictional levels beyond the local community to each ethnic group in a certain area. A value of 0 was assigned to groups “lacking any form of centralized political organization”, 1 to “petty chiefdoms”, 2 to “large permanent chiefdoms/small states” and 3 or 4 to “large states”. Gennaioli and Rainer (2007) employed these scores to build two categories: fragmented ethnic groups scoring 0 and 1 and centralized ethnic groups falling into categories 2, 3 or 4.
 
3
Lang (1975) discusses the increase in transportation costs due to higher distance from the metropolis for the case of Spanish and British colonies in the Americas, and its effect on commerce.
 
4
We construct distance from metropolis following the great circle formula in order to capture the differences in transportation costs across European colonial powers. In addition, all else kept equal, the higher the distance from metropolis, the greater the cost of controlling colonies.
 
5
A clear exception is the case of valuables such as gold and silver, for which colonizers usually engaged in mining even in places located far away from the sea (e.g., the silver mines in Potosí). As documented by Bruhn and Gallego (2012), Potosí is not only situated more than 400 miles away from the nearest natural seaport but has an elevation of about 4000 m. These factors did not prevent the transport of silver through the Andes from taking place. This transportation was conducted by means of mules, llamas and Indian carriers.
 
6
As noted by Armstrong and Read (2003), in the case of island archipelagos, internal transportation costs may be higher.
 
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Metadata
Title
Sensitivity to Alternative Theories
Authors
Daniel Oto-Peralías
Diego Romero-Ávila
Copyright Year
2017
Book
Colonial Theories of Institutional Development

Print ISBN: 978-3-319-54126-6

Electronic ISBN: 978-3-319-54127-3

Copyright Year: 2017

DOI
https://doi.org/10.1007/978-3-319-54127-3_5

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