Property Formation in Weak States: Theory and Evidence from Imperial Brazil

Abstract: Local elites are assumed to resist state attempts at reforming property regimes out of fear of disempowerment. I propose a theory to explain why traditional authorities might support, and comply with, state-backed land tenure systems in contexts of limited administrative capacity. In the absence of restrictions on the customary use of land, I argue that a disruption to forced-labor arrangements encourages elites to promote an exclusionary property order that invalidates workers' claims, reduces mobility, and facilitates the transition to cheap wage labor. I test this theory in Imperial Brazil, where the end of the Atlantic slave trade led southeastern planters to support the Land Law of 1850. Using a novel hand-collected geocoded data set, I show that planters in parishes with more slaves voluntarily shifted their landholdings to freehold tenure to subsidize the arrival of poor immigrant workers. I also show that individual parliamentarians who were slaveowners voted favorably for the Land Law as it denied the possession claims of the rural poor. These findings reveal that property formation in weak states is the result of a co-production effort between local and central interests and not of unilateral state action.