The persistence of (subnational) fortune: geography, agglomeration, and institutions in the new world

William Maloney and Felipe Valencia Caicedo

No 6187, Policy Research Working Paper Series from The World Bank

Abstract: Using subnational historical data, this paper establishes the within country persistence of economic activity in the New World over the last half millennium. The paper constructs a data set incorporating measures of pre-colonial population density, new measures of present regional per capita income and population, and a comprehensive set of locational fundamentals. These fundamentals are shown to have explanatory power: native populations throughout the hemisphere were found in more livable and productive places. It is then shown that high pre-colonial density areas tend to be dense today: population agglomerations persist. The data and historical evidence suggest this is due partly to locational fundamentals, but also to classic agglomeration effects: colonialists established settlements near existing native populations for reasons of labor, trade, knowledge and defense. Further, high density (historically prosperous) areas also tend to have higher incomes today, and largely due to agglomeration effects: fortune persists for the United States and most of Latin America. Finally extractive institutions, in this case, slavery, reduce persistence even if they do not overwhelm other forces in its favor.

Keywords: Population Policies; Economic Theory&Research; Inequality; E-Business; Transport Economics Policy&Planning (search for similar items in EconPapers)
Date: 2012-09-01
New Economics Papers: this item is included in nep-geo, nep-his and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: The Persistence of (Subnational) Fortune: Geography, Agglomeration, and Institutions in the New World (2012)
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