Melissa Dell: evaluation

Transcript context

…If you look at places that benefited from land reform — which, importantly, is a very specific type of land reform — it didn’t give individual alienable property rights. It gave a community right to a certain amount of land, and then the community decided amongst itself how it was going to divide that. If you look at those villages that benefited more a hundred years ago, they are poorer today. They’re more agricultural today. And a lot of that seems, again, to go back to this particular form of property rights where a community is given land. It can’t be converted from agricultural to nonagricultural uses. Households aren’t able to buy or sell the land. It belongs to the community. The community decides how it’s divided. That creates all kinds of political problems because the people with power in the community can sustain that power by holding control of land. That has been bad for economic development, which again goes back to a point that when we make these statements about how history matters, it’s very important to be precise. If you were to make a statement like “Land reform is bad for economic development,” that wouldn’t really be consistent with the evidence because there’s been land reforms in East Asia following World War II that gave people individual property rights. Much of the land was land that had been confiscated from the colonizers in the case of Taiwan. And those seem to have been much more successful. Whereas when you have this odd form of community property rights in Mexico that’s subject to these political problems, it seems to be pretty bad. To use another example, I’ve done some work showing that extractive institutions in Peru — forced labor in mines — was bad for long-run development and traced out the reasons why that was the case. I have another paper looking at forced labor in Java in Indonesia, historically. And the conclusion there is that the places that were more affected by it are actually better off today. Why would that be the case? I think we can all agree that forced labor was horrible for the people that were subjected to it and were mistreated, but it has very different long-run effects depending on exactly how it was set up. In Peru, this is forced labor in mines. They’re taking out silver. Once the silver disappears, that economic activity is gone. You don’t build much infrastructure because it’s just one mine. All you have to do is get that silver down to the coast where you can put it on a boat and send it to Spain, so there’s not much infrastructure built along with that. In order to make it easier for the government to force people to work in the mines, you don’t let other economic activity come into those regions because you don’t want competition for labor. Part of that was not giving people secure property rights because they didn’t want landowners to come in and be competition with the state for this labor, and that has important effects. Whereas in Indonesia, it wasn’t about mines. ple secure property rights because they didn’t want landowners to come in and be competition with the state for this labor, and that has important effects. Whereas in Indonesia, it wasn’t about mines. It was about sugar, and it was very large scale. It was actually a larger-scale system than what you saw in Latin America. It was a huge share of Dutch revenue. But sugar has a very different production process. Once you cut the raw sugar, you can’t put that on a boat and send it to Spain. It’ll spoil quickly. It’s very heavy to transport. You can’t even take it more than a few miles. It needs to be processed, and that processing needs to happen in what, for the time, was a sophisticated food-processing factory. So what happens is you end up building a lot of infrastructure for factories, for transport because you have many of these factories scattered all out across Java. It’s not a single mine in one place. And for each of those factories, you need a road or a railroad to get that back to the port, to send it then to the Netherlands, which was the colonizing power. Then you have these factories with sophisticated technology that’s set up. And the sugar that wasn’t good enough to be sent back to the Netherlands could be sold on the local markets. And you need to put that sugar in other food. Sugar has really dense linkages to a lot of other industries because you put sugar into everything. So you set up other food-processing factories nearby, and that’s a source of agglomeration. They’re both forced labor. The objectives of both of those institutions were to make as much money as possible for the colonial powers. In both cases, they didn’t care much at all for the colonial population as long as they stayed alive and kept contributing to the first forced labor — that was the objectives of the colonizers. But because there’s two very different technologies and associated sets of infrastructure that come along with mining versus sugar production, the long-run effects are totally different. I think the persistence is important in both cases, but the effects it has are very different. So we have to be specific — Take the Mexican results. Why should we trust the per capita income numbers from Mexican villages? I did field work in a Mexican village 20 years ago. I went around, and I asked everyone if they knew what a census taker was. They didn’t even know what I was talking about. They didn’t think any census taker had ever visited. They’re supposed to be sent teachers from down in the city. The teachers never come. They say, basically, no one ever comes up to see the village. So if we look at per capita income numbers from 1920, 1930, even 1980, 1990, why do we trust them much? Aren’t they just numbers that Mexican workers made up so they didn’t have to go visit the village?…

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