Shipwrecked by rents

Fernando Arteaga, Desiree Desierto and Mark Koyama

Journal of Development Economics, 2024, vol. 168, issue C

Abstract: The trade route between Manila and Mexico was a monopoly of the Spanish Crown for more than 250 years. The ships that sailed this route — the Manila Galleons, were “the richest ships in all the oceans”, but much of the wealth sank at sea and remains undiscovered. We introduce a newly constructed dataset of all of the ships that traveled this route, and construct a model showing how monopoly rents that allowed widespread bribery would have led to inefficient cargo loading and delayed ship departure, which increased the probability of shipwreck beyond normal levels. Empirically, we demonstrate not only that ships that sailed late were more likely to shipwreck, but also that the effect is stronger for galleons carrying more valuable, higher-rent, cargo. This sheds new light on the relationship between, and social costs from, monopoly rents and corruption.

Keywords: Corruption; Rent-seeking; Bribery; Shipwrecks; Institutions (search for similar items in EconPapers)
JEL-codes: K00 N00 N13 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304387823001967
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Shipwrecked by Rents (2020)
Working Paper: Shipwrecked by Rents (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:168:y:2024:i:c:s0304387823001967

DOI: 10.1016/j.jdeveco.2023.103240

Access Statistics for this article

Journal of Development Economics is currently edited by M. R. Rosenzweig

More articles in Journal of Development Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().