Research assistance for this paper was ably provided by Jenna Bernhardson, Diego Galeano, and Carlos L. Góes. We want to thank the comments and helpful suggestions of Paul Rhode and the anonymous referees of this journal. We benefited from comments on earlier drafts by Ran Abramitsky,
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: Recent research links the inequality across countries and regions to colonial institutions. This paper argues that trade shocks could alter the development path of a country or subnational units, in spite of its colonial institutions. This hypothesis is analyzed using state-level data for Brazil, a country with high regional heterogeneity in endowments. We find that positive trade shocks, or improvements in export tax revenues, increased expenditures on education per capita and education outcomes in the period 1889 to 1930. In fact, trade shocks ended up altering the inequality in education levels across states in a permanent way. The paper ends by explaining why politicians spent windfall tax revenues to invest on education. Keywords: Institutions; Fiscal Federalism; Education; Long Run Development. JEL Classification: I20; H41; H75; N26; N36; N46; N96.
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Documents inResumen: Investigación reciente relaciona la desigualdad actual entre países y regiones con las instituciones coloniales. Este artículo argumenta que choques comerciales pudieron alterar la trayectoria de desarrollo de los países o de unidades subnacionales, a pesar de sus instituciones coloniales. Esta hipótesis es analizada utilizando datos a nivel estatal para Brasil, un país con gran heterogeneidad regional en dotaciones inciales de factores. Nosotros encontramos que choques comerciales positivos, o aumentos en los ingresos por concepto de impuestos a la exportación, incrementaron los gastos y resultados en educación en los estados brasileños entre 1889 y 1930. De hecho, dichos choques alteraron la desigualdad educativa entre estados de una manera permanente. El artículo finaliza explicando porque los políticos utilizaron estos ingresos fiscales para invertir en educación.
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