Slavery, Inequality, and Development: Evidence from the Georgia Experiment

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Abstract:

From 1735 to 1751, the Board of Trustees of the Province of Georgia imposed the only ban on slavery among the North American colonies. Exploiting the historical boundary between the 88 counties of Trustee Georgia and the 71 counties that were appended to the colony after 1751, I analyze the effects of this initial institutional difference on subsequent differences in slave dependence, land inequality, income, and poverty.  I find that counties that had been covered by the initial Trustee ban subsequently had lower slave population density, fewer farms holding more than 10 slaves, and have higher income and lower poverty rates today.  I further find that while counties affected by the ban did not have significant differences in pre-Civil War land inequality, productivity, industrial development, or educational investment, their economic output was significantly more diversified and less reliant upon the production of cash crops.  Finally, I demonstrate that controlling for pre-war output diversification significantly reduces the estimated relationship between Trusteeship and current income.  Results therefore suggest that the effects of initial differences in labor institutions can persist even where those differences are not determined by geography, and that a primary channel of persistence is the path-dependence of early economic specialization.

Last updated on 11/03/2016