Land Conflict, Property Rights, and The Rise of The Export Economy in Colombia. 1850-1925. Cambridge

Economic History Association
Land Conflicts, Property Rights, and the Rise of the Export Economy in Colombia, 1850-
1925
Author(s): Fabio Sánchez, María del Pilar López-Uribe and Antonella Fazio
Source: The Journal of Economic History, Vol. 70, No. 2 (JUNE 2010), pp. 378-399
Published by: Cambridge University Press on behalf of the Economic History Association
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Land Conflicts, Property Rights, and the
Rise of the Export Economy in Colombia,
1850-1925
Fabio Sánchez, María del Pilar López-Uribe,

and Antonella Fazio
The poor performance of the Colombian economy in the world markets

the late nineteenth and early twentieth centuries are attributable, in part
weakness of settlers' property rights in frontier lands. To examine this is
collected data on production of agricultural exports at county (municipa
in 1892, coffee production in 1925, and of public land allocation a
conflicts during the nineteenth and twentieth centuries. The quantitative
suggests that in the absence of land conflicts, the per capita produc
agricultural exports would have been in 1925 at least twice as much
observed.
rise in Colombian export activity during the era of economic

globalization from 1850 to 1912 paled in comparison with the rise
in exports in the rest of Latin America.1 Colombia's export growth of
3.5 percent per year during the period was below the average of 3.9
percent for Latin America as a whole. In 1913 Colombia's exports of
$6 per capita were among the lowest in Latin America, well below
the Latin American average of $24. 2 The traditional view states that
Colombia exhibited high vulnerability to cycles in world demand and
was one of the Latin American countries in which the export gains
prompted by booms were almost completely annulled during busts.3
Because Colombia did not become an important supplier of raw
The Journal of Economic History, Vol. 70, No. 2 (June 2010). © The Economic History
Association. All rights reserved. ISSN 0022-0507.
Fabio Sánchez is Full Professor, Maria del Pilar López-Uribe is Instructor Professor and
Researcher at CEDE, and Antonella Fazio is Researcher at CEDE, School of Economics,
Universidad de los Andes, Calle 19a # 1-37E, Bloque C, Bogotá, D.C. Colombia. E-mails:
fasanche@uniandes.edu. co, del-lope@uniandes.edu.co, and a-fazio@uniandes.edu.co.
We are grateful to Catherine LeGrand, Enrique López, Jorge Orlando Melo, Jose Antonio
Ocampo, the editor of this Journal, and the participants of the CEDE's seminar for their
valuable observations. We would also like to thank Diego Jaramillo, Booris Piraneque, and
Diana Rocha for their excellent work as research assistants. The authors appreciate the useful
and insightful referees' and editor's comments that certainly contributed to improve our
research.
1 O'Rourke and Williamson, Globalization and History.
Bulmer- Thomas, Economic History of Latin America', and Cardoso and Pérez, Historia
Económica de América Latina.
3 For discussions of the lack of development in the export sector, see the hypotheses called
"production-speculation" and "lottery of goods" in Ocampo, Colombia; and Bulmer-Thomas,
Economic History of Latin America.
378
Land Conflicts, Property Rights 379
material for European manufacturing industries, she was not attractive

to immigrants or foreign investors, which in consequence reinforced
her exporting backwardness. We offer a supply-side complement to that
explanation. The weakness of land property rights and consequent
conflict over the rights made it difficult for Colombia to take advantage
of the export opportunities available to them.
On a de jure basis, national legislation on public land allocation
adapted to the boom in world demand for primary products with a goal
of facilitating land titling and protecting the peasant settlers from large
landowners' encroachments. However, the defacto power of the large
landowners and the high transaction costs of titling land prevented all
but a few peasant settlers from acquiring formal property titles. The lack
of formal property rights on the frontier together with opportunities for
higher revenue from exports of primary goods caused the emergence of
land conflicts at the turn of the twentieth century.4 The property rights
disputes between peasant settlers and landowners, in turn, led to a level
of exportable production much lower than its potential.5
LAND SUPPLY AND PROPERTY RIGHTS AT THE FRONTIER
The institutions of the post-Independence Colombian economy in

first half of the nineteenth century were deeply rooted in its colo
past and inherited most of its features.6 The structures of taxat
foreign and domestic trade, and the labor force in the nineteenth cen
were quite similar to those of the Borbonic period at the end of
eighteenth century. Nearly 80 percent of exports were precious me
whose revenues were used to import mainly consumption goods, wh
were taxed to provide most of the government's income. Thus, pub
finances were weak and depended mainly on customs that mad
more than 50 percent of public revenue.7 Only a small percentag
workers were free, and those workers were primarily located in ur
centers. The rest worked in the haciendas under nonwage arrangem
as sharecroppers, tenants, peons, or domestic laborers.8
4 The conflicts are defined as petitions to a judicial or to any other government autho
demanding protection of land property rights. The petitioners included individual p
settlers, groups of peasant settlers, and landlords and/or private individuals.
Exportable production comprised the agricultural goods produced to be sold in
international markets.
6 Ocampo, Colombia.
7 Ibid.
8 Ocampo, Colombian and Tovar, Grandes Empresas.
380 Sánchez, López-Uribe, and Fazio
In the middle of the nineteenth century, the Colombian economy

started to break free from its colonial structure. Foreign trade expanded
and diversified. Precious metals as a share of exports fell, as exports of
new products, including tobacco, coffee, quinine, indigo, and leather,
grew. Between 1850 and 1880 exports grew on average 4 percent per
year, prompting the expansion of river navigation and shipping, road
construction, and banking.9 However, only coffee became a sustainable
export product, rising as a share of exports from 8 percent in 1850 to 12
percent in 1885 to 50 percent in 1900 and 79 percent in 1929.
Population growth from two to five million people between 1851 and
1913 prompted the occupation of the vacant lands {baldios) in agrarian
frontier areas. Before the 1870s property rights in these frontier lands
were in general weakly defined, as informal agreements established the
boundaries of the settlers' terrains. Little more was needed because the
frontier land was abundant and economic opportunities from land were
limited. However, the expansion of world markets after 1870 offered
new economic prospects to producers of primary goods in the periphery.
The rising population moved into the western and southern parts of
Colombia along the paths followed in Map 1 and stimulated demand for
land, which led to increases in land prices. The notary data on land sales
for the Department of Cundinamarca show that the price per fanegada
(0.66 hectares) rose by more than 200 percent between the 1850s and
the end of the century.10 As the demand for land rose, agrarian producers
sought more formal property rights that would allow them to take full
advantage of the opportunities offered by the world markets.
Peasant settlers faced many obstacles to establishing formal title
to the land they occupied. Titling was costly since it involved
establishing fencing and hiring lawyers and surveyors. Further, local
large landowners {terratenientes) were powerful and used every tool
at their disposal to prevent land titling to peasants.11 On many occasions,
big landowners successfully claimed the terrain already occupied by
peasants. The peasants responded by trying to remain on the land and
farming it themselves. These conflicts were stimulated by the weakness
and instability of formal property rights in the frontier in a context of
expected higher land returns.12
9 Ocampo, Colombia.
10 Sánchez, Fazio, and López-Uribe, Precios.
1 ] LeGrand, Frontier Expansion.
12 Several incidents of large landowner's encroachment have been described by historians.
Hermes Tovar used archival evidence to show that the practice of big landowners of claiming
terrains already in the hands of peasants was quite common.
Map 1
PRESENCE OF COFFEE PRODUCTION IN 1851, 1892, AND 1925
Sources: Geografìa Física y Política de la Confederación Granadina, volumes I, II, III, IV, and
V; Boletín Trimestral de Estadística; Monsa'vG,Colombia Cafetera; and Instituto Geográfico
Agustín Codazzi, www.igac.gov.co.
According to Catherine LeGrand, there were two phases of legislation

on public land allocation during the nineteenth century. During the
first phase from 1820 to 1873, the government sought primarily to
cover the expenses of the War of Independence.13 The central government
13 LeGrand, Frontier Expansion. The expenses of independence included both internal and
foreign debts and payments to war veterans, their creditors or legitimate children, who were
issued bonds that were exchanged for or redeemable in public lands.14

This policy meant that most of the public lands were allocated to rich
businessmen and big landowners. After 1873 land titling policy was
redirected to bring it more in line with the economic changes ignited
by the growth in the export economy. Thus, Law 61 of 1874 and Law 48
of 1882 established that settlers who occupied terrains for five years or
more and made productive use of them would be awarded property
titles.15 The legislation also limited the concentration and unproductive
use of the land. For instance, Law 48 of 1882 established that the
maximum allocation would be 5,000 hectares. In 1912 it was reduced to
2,500. The law also determined that if the land remained unproductive
for more than ten years, it would return to the government's hands.16
However, the titling process typically involved surveyors and lawyers'
fees, headed paper, stamps, charges, and property registration, and
the central government was not effective at enforcing land laws at the
local level.17 As a result, many settlers on the frontier decided not to
pay the high transactions costs and did not establish formal property
rights to the land they settled.18 In an environment of growing economic
compensated with lands of approximately 10 hectares. See Parsons, La Colonización

Antioqueña. According to Palacios, until 1873 the main usage of baldios was to serve as
collateral for Colombia's foreign debt, see Palacios, El Café en Colombia.
14 The Colombian Congress issued certificates of public debt redeemable in public lands.
"Such certificates were used to back the national debt, to pay veterans of the Independence wars,
and to subsidize the construction of roads and railroads. Once distributed, the land certificates
did not have to be exchanged for land but could be freely bought and sold," see LeGrand,
Frontier Expansion, p. 1 1 .
15 LeGrand mentions that the legislation protected the settlers, guaranteeing them the property
rights of any baldíos they took over, thus preventing their expulsion from the lands that they
occupied. Articles 2, 5, and 6 from law 48 of 1882 are examples of such legal protection. Article
2 indicated that the land cultivators would be considered "good faith" owners and therefore
could not be deprived of the property unless a sentence ruled otherwise. Article 5 declared that
should there be a case in which the cultivator lost the property through a ruling, he could not
have the land he occupied taken from him until he was compensated with the value of the
improvements he had made to the land. Lastly, article 6 stipulated that the agents of the public
ministry must support the cultivators oí baldíos in any case of land dispute against them.
16 LeGrand, Frontier Expansion', Parsons, La Colonización Antioqueña; and Brew, El
Desarrollo Económico.
LeGrand, Frontier Expansion.
"By law, every applicant for a public land grant had to hire a surveyor to measure the
territory. If the parcel was less than 50 hectares in size, the surveying costs generally exceeded
the market value of the land itself. The settler also had to pay travel costs of witnesses and local
authorities from the municipal seat to the site of the claim and back," see LeGrand, Frontier
Expansion, p. 30. Once the settler completed at least five years as a squatter, several steps were
needed to finish the titling process: a) hiring a surveyor to measure the terrains and a lawyer to
fill the request's paperwork; b) mailing or taking the application to the nearest town with
judiciary authorities; c) having the authority's approval after visiting the terrains; and d) paying
the property registration if approval was given. Palacios also states that sometimes the legal
procedure to title a terrain was more expensive than the terrain itself. In addition, the frequent
opportunities for agricultural activities, the interaction between the settlers'

informal rights and the increase in the land returns and export prices led to
land conflicts.19
Policies to liberalize access to land during the second half of the
nineteenth century were implemented by the liberal party administrations
as part of a series of new policies to promote economic progress. The
liberal government established a Federal Republic named the United
States of Colombia, eliminated slavery, abolished a wide range of taxes,
and promoted free trade. Further, the government expanded the land
available for economic exploitation by granting or selling public lands
(baldios), disentailing (expropriating and selling) church goods and land,
and dissolving indigenous territories or communal lands (resguardos).™
Between 1850 and 1930 the new land policies were used to distribute
nearly 6 percent of the inhabited Colombian territory that belonged to the
state to private owners.21
The titling of public land followed the cycles in export prices as shown
in Figure 1. Before 1850 only about 20 square kilometers per year were
titled.22 The titling rose to 90 square kilometers from 1850 to 1865 as the
export economy grew and export prices rose. During the quinine and
tobacco export booms of the 1870s, land granting skyrocketed to nearly
4,000 square kilometers per year as the export price index rose from 300
to over 400. After a reduction in titling in the early 1880s, a new rise of
over 50 percent in coffee export prices and export growth led titling to a
new peak of 3,000 square kilometers in 1891-1895.
The combination of a drop in coffee prices between 1896 and 1900
and the Thousand Days War between Liberals and Conservatives
between 1898 and 1902 caused exports to drop sharply. Land titling
dropped to a low in 1901-1905, before rising sharply to its highest
levels during the early 1920s.
changes in the government entities in charge of handling baldios also contributed to curb titling
for peasants. See Palacios, El Café en Colombia.
19 Alston, Libecao, and Mueller, "Violence," d. 152.
20 Díaz, La Desamortización; and Ocampo, Colombia.
After the Conservative party gained the presidency in 1886, it reversed nearly all of
the policies adopted by the liberals by abolishing the federal Republic, centralizing the
administration of government, returning privileges to the Catholic Church, and making trade
policy more protectionist. Conflict between the two groups ultimately led to the One Thousand
Days Civil War from 1898 to 1902. See Ocampo, Colombia, p. 1 14.
22 The existing data show that the quantity of land granted between 1827 and 1850 was low,
since the government did not encourage the colonization of frontier lands. In fact, land sales
were regarded as a source of fiscal revenue, see LeGrand, Frontier Expansion.
Figure 1
EXPORT PRICE INDEX, NUMBER OF TRANSACTIONS, AND SQUARE KILOMETERS
OF PUBLIC LANDS TITLED, 1850-1910
(in five-year periods)
Sources: Gaceta Oficial, 1854, 1856, 1858-1861; Registro Oficial, 1862-1864; Diario Oficial,
1865-1931; Ocampo, Colombia; and authors' calculations.
Figure 1 also presents the number of public land grants, which

did not always follow the pattern for land titling. Before 1900 the rise
of the number of titles coincided with the increase of the amount
of land titled. In contrast, between 1900 and 1915 as the number of
land titles increased, the quantity of land titled grew at a slower pace,
implying a reduction in the size of the lots titled.
According to Table 1, between 1853 and 1873 61 percent (318) of
the titling allotments were comprised of land granted to peasant settlers
{a titulo de cultivador) and 39 percent (206) to public land sales through
bonds to big landowners. The average of 25.8 square kilometers (around
6,400 acres) of land per title for the land acquired by bonds was
much higher than the 5.1 average (around 1,260 acres) for titles allotted
to peasants {cultivadores) through free grants. The peasant allotments
seem rather large, which may suggest that those who decided to
obtain formal titles were relatively well off and willing to pay the
Table 1
L AN D _ALLOC ATIONBYJ^TE^ TITU^, 1 8^-1930
1853-1873 1874-1892 1893-1917 1918-1930 Total
Titles allotted to large

landowners through bonds 206 192 324 120 842
Titles allotted to peasant

settlers through free grants 318 413 1479 266 2.476
Total number of titles allotted 524 605 1803 386 3.318
Average size of plots titled to

large landowners in square
kilometers 25.84 21.7 12.02 16.99 18.31
Average size of plots titled to

peasant settlers in square
kilometers 5.11 4.63 2.98 7.73 5.11
Average size of total plots

titled in square kilometers 15.47 13.16 7.5 12.36 11.71
Sources'. Gaceta Oficial, Í854~'Í856Í ¡gÎ]^
1865-1931; and authors' calculations.
high transaction costs the process involved. From

when legislation was more favorable to squatters,
land allotments were granted to them, but the avera
land per title was smaller at 4.6 square kilometers. H
national government policies intended to favor and to att
would occupy small parcels, most of the land titled en
private buyers' hands.
From 1893 to 1917 the titling activity intensified. P
obtained 82 percent of the 1,803 allotments granted. I
average size of the plots in square kilometers dimini
landowners from 21.7 to 12 and for peasant settlers f
The declines resulted because of compliance with the l
the maximum lot size to 25. From 1918 to 1930 titling
moderate, although the average lot size rose. It was p
the late nineteenth and the early twentieth centurie
agriculture experienced a vast geographical expansion as
coffee municipalities jumped from 200 in 1892 to 387
the number of coffee trees grew tenfold from 35 to 350 m
Figure 2
DEPARTMENTAL SHARE OF LAND ALLOTMENTS UP THROUGH 1925 AND COFFEE
PRODUCTION IN 1925
Sources: Boletín Trimestral de Estadística Nacional, 1894; Gaceta Oficial, 1854, 1856, 1858-
1861; Registro Oficial 1862-1864; Diario Oficial, 1865-1893; LeGrand, Frontier Expansion;
and authors' calculations.
The largest part of the export agriculture, particularly coffee, located

itself in the frontier areas. Figure 2 shows a high correlation at the
departmental (state) level between the 1925 coffee production and
the share of public land allotments.23 Antioquia, Valle, and Norte de
Santander were the leading coffee producers, and these departments
received the highest proportion of public lands allotments during the
late nineteenth and early twentieth centuries.
LAND CONFLICTS
The land conflicts arose as a consequence of a slow titling p

of public lands occupied by peasant settlers in an environme
increasing opportunities for primary exports. As land values wen
with the rise in export opportunities, peasant settlers demanded
formal property rights over the land they settled, but the gove
was slow to supply the titles. Meanwhile, large landowners incre
23 A similar correlation is observed for 1 892 export production.
Figure 3
DEPARTMENTAL SHARE OF LAND ALLOTMENTS AND CONFLICTS LANDS UP
THROUGH 1925
Sources'. See the sources for Figure 2.
sought to usurp the land occupied by squatters on the frontier. Bet

1 827 and 1 869 just one agrarian conflict was registered. The numb
conflicts then rose to 69 between 1870 and 1900, while coffee incr
its share of exports and large landowners sought to expand their l
where they already had properties.24 A steep rise in coffee prices fr
to 25.9 U.S. cents between 1900 and 1929 coincided with a rise in land
conflicts to 137 between 1901 and 1917 and 241 from 1918 to 193 1.25
Figure 3 depicts the relationship between the department's shares in
the total numbers of land conflicts during 1850-1917 and in the total
amount of public land allotments indicating that frontier expansion
and agrarian conflicts are positively correlated. We argue that the
land conflicts were driven by two factors that impeded the spread of
formal property rights among squatters: the high cost of titling and
the central government's low capacity to enforce land laws and to
effectively provide titles at the local level. These factors facilitated large
24 About 63 percent of the land conflicts occurred in municipalities where land was allotted
to big landowners through bonds. Calculations are based on Gaceta Oficial, 1854, 1856,
1858-1861; Registro Oficial, 1862-1864; Diario Oficial, 1865-1893; and LeGrand, Frontier
Expansion.
25 LeGrand, Frontier Expansion.
388 Sánchez, Lopez-Urite, and Fazio
landowners who sought to appropriate for themselves the squatters'

terrains.26 The inadequate specification of property rights led to land
conflict, which, in turn, would have reduced export activity.
EMPIRICAL MODEL
To show the impact of land conflict on export activity, we pe

two cross-sectional analyses. We start with ordinary least s
(OLS) regressions that also control for other factors that mig
influenced export activity. To examine these relationships, we sta
the following estimating equation:
Yt = /?0 + ß^hysical geographyi + ß2DistancetoMarket$i + ß3Land

+ ß4Production1QSli + ßsLandConflicti + £¿
where Y¡ is the dependent variable measured in two ways: the n

logarithm of per capita value of exports in pesos of 1892 in mun
(county) /, or the number of per capita coffee trees in muni
i in 1925. For 1892 the value of per capita exports is calcula
multiplying the production of each export product - tobacco,
sugar, cacao, and plantain - by their domestic average price.
PhysicalGeographyi is a vector that includes measures of a
soil fertility, precipitation, the size of the river network in kilo
temperature, humidity, distances to the Pacific and Atlantic ocea
the distance to the Cauca River. DistancetoMarketSi is the dis
each county to Bogota as the main administrative and economic
of Colombia.
Landsupplyi is a vector of variables describing the extent to which

dissolution of indigenous communal lands took place during the
eighteenth century, church land disentailments occurred between 1864
and 1884 and public land titling occurred from 1830 to 1892 and
from 1893 to 1925. The title granting variable indicates that frontier
expansion indeed occurred there. In fact, the first squatters may
have settled years and even decades before the first titling process
occurred. The three types of land supply expansion not only influenced
the production of exports in the county where they happened, but
also in the neighboring ones. Since most of the production of exports
was located in counties with public land allotments, it is expected
that some spillovers of the cropping know-how for the new exports
26 Alston, Libecap, and Mueller, "Model of Rural Conflict," show how the agrarian polices
during the 1 980s in Brazil may have given incentives for both squatters and farmers to engage
in violence.
may have been transmitted to the neighboring counties. On the other

hand, if the agricultural know-how was associated with traditional
crops usually grown in the former indigenous lands, the spillover effect
on agricultural exports might have been zero or negative. In order to
observe these spatial spillovers, we calculated spillover versions of
three variables: "public land influence, 1850-1892" and "public land
influence, 1893-1925," "disentailment influence" and "dissolution of
communal land influence." Each variable takes the value of one in a
county where their existence is reported and zero if the county is located
more than 100 kilometers away from any county that had that type of
land expansion. If the county did not report that type of land expansion
and is located within 100 kilometers of a county that did have that
type of expansion, it is given a value of ((100 - distance)/ 100)2, where
distance is the number of kilometers to the nearest county that reported
the type of expansion was assigned to it.27
Production 1 85 n is a vector of dummy variables for the production of
sugar, tobacco, cacao, plantain, and coffee in county /' in 1851. We
include this vector as it is expected that a county that in the past
had produced exports products was more likely to produce them again
if new market opportunities would arise. Because Colombia exported
more tobacco than plantain or sugar in the counties with tobacco crops
in 1851, the primary benefit in those areas would have come from better
knowledge of the export business, rather than from knowledge about
production of coffee.
LandConflicti takes a value of one if a land conflict was first reported
in a municipality (county) between 1827 and 1892 and zero if not
conflicts were reported in the 1892 regression. It takes focuses on
the period between 1893 and 1925 for the 1925 regression. Conflict
is defined as any petition of protection of property rights over land
made to a judicial or to any other government authority - either local,
departmental, or national. The authorities that received these petitions
were local judges, police chiefs and mayors, departmental governors
and courts, the minister of finance, the general attorney of the country,
and even the country's Congress. Once a petition was received,
the recipient authority either started the process or sent it to the office
in charge of dealing with the matter. Those petitions came from
peasant settlers, their representatives, municipal authorities, landlords,
and private individuals.28 The peasant settlers' petitions could involve a
27 We tried with other distances and the results did not change significantly.
Here are some examples of such petitions. In 1908 San Onofre residents' filed a complaint
before the local mayor that some squatters refused to move out of the terrains they had been
illegally occupying, disobeying the order of the Ministry of Finance (at that time in charge of
single squatter but often did more than 10. Some petitions were made
even in behalf of more than 500 peasant settlers.
We are interested in measuring the causal effect of land conflict on
export production, but there is a potential problem with endogeneity
because land conflict itself was likely to rise in response to higher
expected land returns associated with expanded production of exportable
goods. This will impart a positive bias to the coefficient for land conflict
in the OLS regression that will cause the coefficient to underestimate
the negative effect of land conflict on export activity. To control for
potential endogeneity bias, we use an instrumental variable method with
"closeness to colonial institutions" as the identifying instrument. Thus,
the first-stage equation for land conflicts takes the following form:
LandConf lieti - oco + ai Physical geography '

+ oc2 DistancetoMarketSi+cCz LandSupplyi
+oc4 Production18Sli +oc4 ClosenessColoniallnstitutionsi + v¿
where ClosenessColoniallnstitutions ¡ is a measure of the central

government's influence in county i.29 In the counties where colonial
institutions existed, the central government authority at the end of the
nineteenth century was stronger, and it could better enforce the land
laws and property rights at the local level there than in counties where
such authority was weak or did not exist at all. To create the variable, we
determined the location of the encomiendas in 1560 and the places with
more than 20 slaves in 1800.30We then constructed a distance measure
with value one if a county had both an encomienda in 1560 and slaves in
1800. The value is zero if the county was more than 100 kilometers
distant from both the closest encomienda and the closest slave area. To
obtain the value for the remaining locations, we calculated the distance to
land granting policy). Similarly in 1894 in Tierra Nueva, peasant settlers demanded protection
of their rights as de facto landholders since Mr. Eugenio Garcia was collecting usage rents on
the land they were cultivating. The peasant settlers maintained in their letters to the department
governor that they had occupied the terrains more than 25 years ago after cleaning the forest.
Likewise in 1894 in the city of Cucuta, squatters complained before a local judge that the police
attacked them because they were occupying some vacant terrains. The squatters argued that they
had settled many years before. See Archivo General de la Nación, Fondo del Ministerio de
Fomento-Baldíos, several years.
29 Based on the visits of 1560 transcribed by Tovar, the Spaniards began to found "villages of
Indians" in the places with indigenous populations, as they needed to use them as a workforce,
see Tovar, No Hay Caciques. Similarly, the slave population was used to work in economic
activities, such as gold extraction, domestic work in some urban centers, or on the sugar or
cotton plantations, see Colmenares, Historia Economica.
30 Tovar, Grandes Empresas; and Tovar, Tovar, and Tovar, Convocatoria.
the nearest encomienda and the distance to the nearest slave area and then
used the following formula:31
! 1 Í (1 00 - dist. encomienda; ) j 2 Í (1 00 - dist.cowüywithslaves) ) 2 |

j-
j2^ YÖO 10° > i
j 0 otherwise
There is evidence th
1800s was stronger
effective in locations where encomiendas in 1560 and slaves in 1800
were located. Further, the effectiveness of enforcing property rights
was reduced as the distance from these colonial locations increased. The
locations with encomiendas and slave populations had long histories of
close monitoring by central authorities. During the conquest of Latin
America, the Spaniards settled in places where the indigenous labor
force was relatively abundant. In order to allocate this labor force in
mining and agriculture in the early 1500s, the crown created the
encomienda, which commended or entrusted a Spaniard and his heirs with
the right to extract tribute goods from a group of indigenous Colombians.
The Spaniard was obliged to Christianize the indigenous group and to pay
taxes to the crown on the goods extracted. To monitor the proper
functioning of the arrangement, the Spanish Crown sent visitors and
judges to determine the taxes to be paid and to enforce the legislation for
the protection of indigenous population. Hence, in the areas where
encomiendas existed compliance with the law was indeed stronger.32
Similarly, in zones with slaves descendant from Africans, the
Spanish Crown granted privileges to exploit mining deposits and
also limited and controlled the miners' usage rights of deposits and
nearby water sources. The authority regulated the mining technology
to be employed. Likewise, the Reales de Minas - villages inhabited
by mining slaves - were constantly visited by the crown's officers
who verified the observance of laws and regulations regarding those
31 The formula was taken from Naritomi, Soares, and Assunção, "Rent Seeking." "Closeness
to Colonial Institutions" was derived from information provided by Duque and Sánchez,
"Instituciones Coloniales." To locate colonial sites, we used the information on tributary
Indians compiled by Tovar, who transcribed the archival data on villages, and number of
Indians and their chiefs that the Spanish Visitador registered in 1560 Tovar, No Hay Caciques.
To locate the 1560 encomienda sites in today's municipalities and to georeference Tovar's data,
we replicated the Visitador' s route on the current Colombian map. Using the Geographical
Diccionario of Colombia that contains the toponymy of more one hundred thousand places,
we matched the 1560 Indian settlements to each of the current Colombian municipalities. The
same methodology was used for 1 800 slave population compiled by Tovar, Tovar, and Tovar,
Convocatoria.
Colmenares, Historia Económica', and Burkholder and Johnson, Colonial Latin America.
settlements.33 In both of these regions, the Spanish Crown or the local

cabildos granted land titles and enforced property rights. In particular, the
central government discouraged the encroachment onto peasant settlers'
lands by landowners, reducing the existence of conflicts. Since the types
of exports in 1892 and 1925 were dramatically different from those in
1560 with the encomienda or in mining with slaves in 1800, we believe
that these variables are uncorrelated with the error term in the final stage
export production equation.
EMPIRICAL RESULTS
Table 2 shows the results from the estimation. We use probi

instrumental variable probit (IV Probit) models to explain the prese
export production and coffee production in 1892 and ordinary
squares (OLS) and two-stage least squares (TSLS) models to expla
per capita levels of 1892 production of exports and of 1925 c
production. The expectation is that both the presence of export ac
and level of export production would be reduced by the presence of
land conflicts. The probit and OLS results in Table 2 for both time p
imply small effects that are statistically insignificant.
The absence of a negative effect might well be the result of a po
endogeneity bias because increased export activity likely increased
probability of land disputes. Table 2 also contains the first- and se
stage equation estimates in the IVProbit and TSLS procedures u
correct for the endogeneity bias. The results from the first-stage equat
suggest that the instruments for land conflicts from 1827 to 1892 and
1893 to 1925 are strong. Columns 5 and 9 show that the coefficient
instrument for land conflicts "closeness to colonial institutions" is
statistically significant and negative.34 This is the expected sign because
counties with colonial institutions or those closer to counties with colonial
institutions were places where the central government could more strongly
enforce the land laws and deter landowners' encroachments. The strength
of the instrument is shown by the Stock-Yogo test for the Cragg-Donald
F-statistic, which rejects the hypothesis of weak instruments at the 10
percent level if one is willing to accept a maximum weak instrument bias
of 20 percent for 1892 and 10 percent for 1925.
33 Colmenares, Historia Económica.

34 The distance to colonial institutions for the 1 892 equation takes a value equal to zero
beyond 100 kilometers. Nevertheless, the values between zero and 100 kilometers were
calculated using a square root functional form.
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394 Sánchez, Lopez-Urite, and Fazio
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Columns 6, 7, 10, and 11 of the same table exhibit the second-

stage results for presence and level of export production in 1892
presence and level of coffee production in 1925. In the four models,
the coefficient of land conflicts is negative. In fact, the IV Probit
coefficient for land conflicts, which is statistically significant at the 1
percent level, indicates that the presence of land conflicts in a particular
county reduced the probability of having export production in 1892
by 50 percent. The negative impact of the early twentieth century
land conflicts was even stronger, as the presence of land conflicts in a
particular county reduced the likelihood of coffee production in 1925
by 58 percent. Thus, weakness of property rights impeded a more rapid
expansion of the export agriculture.
In the analysis of the levels of export production, the TSLS
coefficients are both negative and significant at the 19 percent level for
the 1892 equation and at the 2 percent level for the 1925 equations.35 The
effects of land conflicts on export production were considerable. To get
an estimate of the size of the effects, we calculated the predicted values
of the dependent variables with and without the presence of land disputes
both for 1892 and 1925. The means for the other correlates were used
in the predictions. If no land conflicts had occurred, per capita exportable
production would have been 48 percent higher in 1892 and 169 percent
higher in 1925 respectively. Hence, this means that land conflicts had
limited impact before 1892 and a much stronger one in the 1900s.
Thus it appears that land conflicts, which likely arose from the problems
with defining effective property rights, contributed a great deal to the
poor performance of the export economy and hence to the meager
integration of Colombia in the international markets at the end of the
nineteenth and early twentieth centuries.
As for the effects of other variables, the presence of public land
allotments in a county was associated with greater export production of
0.43 log points (0.52 standard deviations) in 1892 and in 3.32 log points
(1.5 standard deviations) of coffee production in 1925. In contrast, the
dissolution of communal (indigenous) lands during the eighteenth century
35 Although the variable land conflicts are dichotomous with values zero and 1 , the first-stage
values are predicted with OLS. No predicted value for 1827-1892 conflicts is greater than
one, 143 out of 687 are lower than zero but none are below -0.1. For 1893-1925 no predicted
value is greater than one and 106 out of 712 are less than zero. As robustness check, we
also ran second-stage models using the probit predicted values of land conflicts obtaining
coefficients and bootstrapped standard errors similar to TSLS. We also estimated instrumental
variables probit and tobit models for presence and per capita level of export agriculture.
The results obtained for both estimations are also similar to TSLS' s ones and are available at
http://economia.uniandes.edu. co/es/investigaciones_y_publicaciones/cede/publicaciones/docum
entos_cede/2008/land_conflict_property_rights_and_the_rise_of_the_export_economy_in_colo
mbia_1850_1925.
396 Sánchez, López-Unbe, and Fazio
was associated with substantially lower coffee production in 1925 (-1.2

standard deviations), as those lands had been turned into haciendas
strongly oriented to cattle raising and foodstuff crops for the domestic
market.36 Disentailment of church land was negatively related to export
production in 1892 (0.13 standard deviations), but did not have a
statistically significant relationship with coffee production in 1925.
CONCLUSIONS
The analysis confirms the hypothesis that export product

Colombia was slowed by land conflict that likely arose fr
weakness of property rights on the agrarian frontier. The resul
that in the absence of land conflict, export production mig
have doubled. The peasant settlers' lack of land titles fed their f
encroachment, which may have inhibited them from sowing or in
productivity to their highest potential. The limited transforma
informal property rights into formal ones, more in line with the eco
opportunities of globalization, was one of the factors that contr
heavily to delay export development. We see this as one of a num
examples of how the lack of well-defined property rights institut
slow economic performance.37
Appendix 1: Data Sources

Production of exportable products per capita (Log 1892) is the /ogarith
value of the production of exportable products that includes coffee, caca
plantain, and tobacco in 1892 prices. The data were provided by Boletín Trim
la Estadística Nacional, 1894.
Coffee production per capita (Log 1925) is the logarithm of the quantity o
trees in existence in 1925. The data were provided by Monsalve, Colombia Ca
Distance from colonial institutions is calculated as the normalization of the
distance (between zero and one) of a county with respect to the nearest counti
there were encomiendas in 1560 and more than 20 slaves in 1800. It takes a value of
one in the counties where there were both institutions and zero if there was neither
institution in the counties at a maximum of 100 km distance. The data were provided
by Tovar, No Hay Caciques, and Duque and Sánchez, "Instituciones."
Distance from disentailments is calculated by taking into account the distance
between the county in question and the nearest county with disentailed church
properties. It takes a value of one when the county had disentailed properties and zero
36 Tovar, Hacienda Colonial.

37 Acemoglu and Johnson contrast the effect of contracting institutions with property rights
institutions and they find that the latter affect countries' long-term economic performance more,
either measured by income per capita or by the rate of investment, see Acemoglu and Johnson,
"Unbundling Institutions."
if the nearest county with this institution was at more than 100 kilometers distance.
For those counties within the 100-kilometer range, a value of between zero and one
was calculated, depending on the distance to the nearest county that reported this
institution. The data were collected from the Archivo General de la Nación (AGN),
Sección República, Fondo de Bienes Desamortizados (Rolls 1 to 30), Registro Oficial
1862-1864 and Diario Oficial 1865-1884.
Distance from public lands is calculated by taking into account the distance
between the county in question and the nearest county with public land concessions.
It takes a value of one when the county had public land concessions and zero if
the nearest county with this institution was at more than 100 kilometers distance.
For those counties within the 100 kilometer range, a value of between zero and
one was calculated, depending on the distance to the nearest county that reported
this institution. Data were collected from the Registro Oficial, 1862-1864 and Diario
Oficial, 1865-1931.
Distance from dissolution of communal lands in eighteenth century is calculated
by taking into account the distance between the county in question and the nearest
county with dissolution of communal lands in the eighteenth century. It takes a value
of one when the county had dissolution of protection in the eighteenth century,
and zero if the nearest county with this institution was at more than 100 kilometers
distance. For those counties within the 100 kilometer range, a value of between zero
and one was calculated, depending on the distance to the nearest county that reported
this institution. The data were provided by Tovar, Grandes Empresas and No Hay
Caciques.
Dummy conflict 1827-1892 and 1893-1925 takes a value of one if the county had
land conflict between 1827 and 1892 and between 1893 and 1925, respectively and
zero if there were no conflicts. The data were extracted from Archivo de General de la
Nación, Fondo de Tierras Baldías, and from LeGrand, Frontier Expansion.
Dummy production 1851 a matrix of variables for the production of sugar, tobacco,
cacao, plantain, and coffee that take a value of one if the product was produced in the
county in 1851 and zero if not. Information was obtained from Geografia Fisica y
Política de la Confederación Granadina, volumes I, II, III, IV, and V, directed by
General Agustín Codazzi.
Geographical Variables include altitude in meters above sea level; a fertility index
reflecting the aptitude of the land for agricultural activities (drainage, erosion, natural
slopes, sodium contents, and so on.); average precipitation in cubic centimeters; an
index for the extension of primary, secondary, and tertiary rivers that run through
the area of a county; average temperature in centigrade in the county; and measures
of the minimum distance of the county from the Cauca River, from Bogotá, from
Barranquilla on the Atlantic Ocean, and from Buenaventura on the Pacific Ocean. All
the data were provided by Sánchez and Nuñez, "La Geografía."
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Instituto Geográfico Agustín Codazzi, www.igac.gov.co.
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Economic History Association

Fabio Sánchez, María del Pilar López-Uribe,

The poor performance of the Colombian economy in the world markets

rise in Colombian export activity during the era of economic

material for European manufacturing industries, she was not attractive

LAND SUPPLY AND PROPERTY RIGHTS AT THE FRONTIER

The institutions of the post-Independence Colombian economy in

In the middle of the nineteenth century, the Colombian economy

PRESENCE OF COFFEE PRODUCTION IN 1851, 1892, AND 1925

According to Catherine LeGrand, there were two phases of legislation

issued bonds that were exchanged for or redeemable in public lands.14

compensated with lands of approximately 10 hectares. See Parsons, La Colonización

opportunities for agricultural activities, the interaction between the settlers'

Figure 1 also presents the number of public land grants, which

L AN D _ALLOC ATIONBYJ^TE^ TITU^, 1 8^-1930

1853-1873 1874-1892 1893-1917 1918-1930 Total

Titles allotted to large

Titles allotted to peasant

Total number of titles allotted 524 605 1803 386 3.318

Average size of plots titled to

Average size of plots titled to

Average size of total plots

high transaction costs the process involved. From

The largest part of the export agriculture, particularly coffee, located

The land conflicts arose as a consequence of a slow titling p

23 A similar correlation is observed for 1 892 export production.

Sources'. See the sources for Figure 2.

sought to usurp the land occupied by squatters on the frontier. Bet

landowners who sought to appropriate for themselves the squatters'

To show the impact of land conflict on export activity, we pe

Yt = /?0 + ß^hysical geographyi + ß2DistancetoMarket$i + ß3Land

where Y¡ is the dependent variable measured in two ways: the n

Landsupplyi is a vector of variables describing the extent to which

may have been transmitted to the neighboring counties. On the other

LandConf lieti - oco + ai Physical geography '

where ClosenessColoniallnstitutions ¡ is a measure of the central

! 1 Í (1 00 - dist. encomienda; ) j 2 Í (1 00 - dist.cowüywithslaves) ) 2 |

settlements.33 In both of these regions, the Spanish Crown or the local

Table 2 shows the results from the estimation. We use probi

33 Colmenares, Historia Económica.

1^1 M| ^o^?^ fiatili

Ipil ^tls í ^î i"! i « S

Columns 6, 7, 10, and 11 of the same table exhibit the second-

was associated with substantially lower coffee production in 1925 (-1.2

The analysis confirms the hypothesis that export product

Appendix 1: Data Sources

36 Tovar, Hacienda Colonial.

Acemoglu, Aaron, and Simon Johnson. "Unbundling Institutions." Journal of

Environment and Development Economics .4(1 999)

Boletín Trimestral de la Estadística Nacional, 1

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