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Degredados, Their Human Agency, and Micro Institutions in Colonial Brazil: An Institutionalist Reinterpretation

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  • Fernando Zanella
  • Christopher Westley

Abstract

Institutions are widely recognized as determinants of economic development. However, institutional economists often overlook pertinent historical incidents in their search for broad patterns. At times, this search oversimplifies truly complex phenomena. In light of this, we apply a micro-institutional analysis to explain the success of colonial Brazil's early settlements as a mix of accident and design. By doing so, we stress the limitations that can result when applying an aggregate institutional interpretation of economic history and development. We also apply the principal-agent model and its main feature – risk-sharing – to an extreme case that involves settlers and natives risking their lives, while Portuguese principals sought to reduce transaction costs in an important and resource-rich colony.

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  • Fernando Zanella & Christopher Westley, 2015. "Degredados, Their Human Agency, and Micro Institutions in Colonial Brazil: An Institutionalist Reinterpretation," Journal of Economic Issues, Taylor & Francis Journals, vol. 49(1), pages 143-156, January.
    • Handle: RePEc:mes:jeciss:v:49:y:2015:i:1:p:143-156
    DOI: 10.1080/00213624.2015.1013884
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    1. Fernando Zanella & Peter Oyelere & David McMillan, 2021. "Is financial development crucial for all economies?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 9(1), pages 1923883-192, January.

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