Electoral Laws, Political Institutions and Long-Run Development: Evidence from Latin America, 1800-2012

This paper exploits the variation in the timing of electoral law enforcement across nine Latin American countries to consistently examine the contribution of de jure and de facto political institutions to long-run development. The set of novel measures of electoral law enforcement is constructed focusing on de jure vs. de facto suffrage extension, abolition of wealth- and literacy-based voting restrictions, electoral fraud and oppression drawing on the extensive and largely unexploited Latin American historical bibliography. A simple difference-in-differences model of de jure and de facto institutional development is built to account for the effect of electoral law enforcement on institutional development, and used as a source of variation in long-run development paths. The evidence suggests the timing of enforcing electoral laws largely accounts for the contrasting paths of de jure and de facto institutional development in post-independence Latin America. The institutional changes toward suffrage extension, removal of voting restrictions and level-playing field with more inclusive de jure and de facto institutional setup are associated with large-scale improvements in long-run development paths. The effects of de jure and de facto institutions on long-run development do not depend on sample selection, specification bias or unobserved heterogeneity. The counterfactual scenario suggests having de jure and de facto political institutions on a similar level to the United States since independence would yield massive economic gains by narrowing Latin America’s gap behind the U.S by a fifth. The counterfactual based on the institutional parallels of the U.S, Australia or United Kingdom in appears to speak in favor of large-scale gains in long-run development compared to the much smaller gains from the institutional design based on French, Spanish or Portuguese institutional benchmark.