The Persistence of Colonial Institutions in the Modern Economy: An Application of North?s Model of Institutions and Institutional Change to the Fiscal Structures in Argentina and Chile

Abstract

This research focuses on North?s model of institutional change and persistence to the fiscal policy institutions in Argentina and Chile. This report adopts North's methodology to study both formal and informal fiscal policy structures in the colonial, post-colonial and modern period in Argentina and Chile. North?s model is applied to historical information to find where the model works and where it does not. The research also employs Alberto Alesina?s model of ethnic diversity to understand the operation and evolution of fiscal institutions in both countries over time.