Thursday, July 05, 2012

The Other (Other) Providence

Daron Acemoglu and James Robinson:

What explains the very different — albeit short — trajectory of Providence Island from the more illustrious history of the Massachusetts Bay colony? The roots of this difference are not to be found in the germs, culture or ideas that colonialists brought with them — after all, it was the same group of people spearheading both colonization efforts.

Instead, it lies with the conditions that the Puritans encountered, and it was these conditions that ultimately shaped the path of the Massachusetts Bay colony towards inclusive institutions, while strengthening the extractive character of those in Providence Island.

The first factor was that Providence Island became from the get-go a militarized colony, partly because the Company was expecting hostilities from the Spanish (and also intended to use the island as a base against the Spanish). It was also partly because, for reasons we next explain, the elite needed the military fist to control the settlers. This militarized atmosphere contributed to the conflict on the island, discouraging investment and economic activity.

But the most important reason related to what was on the ground and what the investors in London expected to reap from the ground. As noted above, the investors viewed Massachusetts as mostly barren, so did not expect huge profits. It is for this reason that they allowed John Winthrop to take the charter of the colony with him, meaning that authority would rest with the settlers, not back in London. It was for this reason that there was not much opposition to giving private property in land to settlers in Massachusetts. In contrast, the Providence Island Company was a major investment for the prospect of substantial profits. So the Company did not let the reins go and did not allow private property for settlers.

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