Ethnic Diversity, Historical Economic Exchange, and Development: Evidence from Andean Peru

Artiles, Miriam

doi:10.1257/app.20240281

Abstract

Is ethnic diversity good or bad for economic development? Most studies find corrosive e!ects. This paper shows that historical exposure to economic exchange can mitigate these e!ects in the long run. I collect data from a natural experiment of Peru鈥檚 colonial history: the forced resettlement of native populations in the 16th century. Where the resettlement concentrated ethnically diverse populations with a history of internal crop exchange, contemporary populations perform better systematically. Additional evidence suggests that prior experience with mutually beneficial crop exchange shaped more open attitudes toward out-group members. Economic complementarities helped sustain long-run, market-oriented cooperation and local trade.

蝌蚪网

蝌蚪网 Journal:
Applied Economics