On the economic effects of Indigenous institutions: Evidence from Mexico

While Indigenous institutions affect policy outcomes and, consequently, economic development, our understanding of this association is as yet unclear. This paper examines this relationship using land reform in Mexico as a case study. Between 1917 and 1992, the rights to 16 million hectares of ancestral land were transferred to the Indigenous population in the form of land plots known as Comunidades Agrarias. By exploiting novel panel data for 13,600+ municipality-census observations, I find that ancestral land redistribution was more successful in municipalities with more complex Indigenous institutions. I hypothesise that centralised societies would have been more politically cohesive and therefore better able to coordinate collective actions against the state. The economic gains of the restoration policy were mainly found in the area of education.