Caffeinated Development and Other Essays in Latin American Economic History

Abstract

This dissertation consists of three essays. The first one focuses on Colombia after 1850 and measures the impact of the expropriation of Church's assets on political violence. With yearly data on the number of battles per municipality, archival information on the reform, and difference-in-differences, the paper documents a reduction of political violence in places where the Church's assets were expropriated. The paper contests the traditional idea of the expropriation of Church's real estate as a source of political violence. It highlights changes in political competition after the alliance between Conservative factions and the Church was weakened. Specifically, it shows the reduction in political violence was concentrated in municipalities with high political competition and where the Conservative Party was relatively weak.

The second essay studies the effect of the first wave of globalization on developing countries' structural transformation, using data from Colombia's expansion of coffee cultivation. Counties engaged in coffee cultivation in the 1920s developed a smaller manufacturing sector by 1973 than comparable counties, despite starting at a similar level in 1912. My empirical strategy exploits variation in potential coffee yields, and variations in the probability to grow coffee at different altitudes. This paper argues that coffee cultivation increased the opportunity cost of education, which reduced the supply of skilled workers, and slowed down structural transformation. Using exogenous exposure to coffee price shocks as instrument, I show that reductions in cohorts' educational attainment led to lower manufacturing activity in the long-run. The effect is driven by both a decrease in demand for education and reductions in public goods. Finally, coffee cultivation during the early 20th Century had negative long-run effects on both individual incomes and poverty rates.

The third essay explores how changes in commodities’ prices can have differential effects on school enrollment according to characteristics of crop’s production functions. It compares schooling outcomes in counties that specialize in sugar (a land intensive crop with economies of scale) or coffee (mostly produced in small farms) in Puerto Rico between 1900 and 1930. Sugar price increases lead to increases in enrollment in sugar counties, while coffee price changes have a negative relationship with enrollment in coffee regions.