Indigenous Origins of Colonial Institutions

What are the origins of colonial forced labor? While extensive research investigates the effects of colonial forced labor on contemporary political and economic development, little is known about the origins of colonial forced labor. Based on historical accounts, we offer a simple formal model that emphasizes constraints facing profit-maximizing colonists. The model provides a novel explanation for colonial forced labor by demonstrating that local and foreign forced labor depended on different factors. Colonists used local, indigenous forced labor when they encountered an indigenous political administration that was already coercing labor. However, colonists used foreign forced labor, like African slavery in the Americas, when indigenous labor was not already organized and natural resources were present. Original data from 439 subnational territories covering the Americas support the hypotheses across a variety of model specifications. This study implies that differences in political and economic development today may predate European colonialism.