Does history matter? This question has been developed by many authors who have identified the influence of historical events on current economic development. Among the studies are: Acemoglu et al. (2001), which analyzes the effect of colonial governments on the subsequent development of national institutions and economic development; Banerjee and Iyer (2005), which shows the importance of colonial land income systems within India; and Nunn (2008) which analyzes the adverse effects of the slave trade on Africa’s development.
Apart from the above-mentioned, there are other studies that corroborate the fact that historical events have affected long-term economic development. Although the literature is considerable, what is not well understood are the exact channels of causality or a clear picture of the precise variables affecting it.
Nonetheless, one important piece that we have to consider to understand the current economic performance better is culture, which has been studied by Tabellini (2010) and Alesina et al. (2015). The first author estimates the effect of specific cultural traits, which can affect economic development, and the second researches the relationship between culture and institutions. Both authors consider that culture is an element that explains the current performance of developing countries.
I also agree with the authors and firmly believe that culture is a key factor in explaining why countries like Bolivia are trapped in poverty and remain developing countries, based on my own experience as a Bolvian. Before we analyze the relationship between culture and economic development in Bolivia, it would be helpful to look at some history.
Since colonization, the relationship between Spaniards and Indians has been one of subjugation. The Spaniards came to America with the aim of increasing their wealth and personal status. They were rude and self-centered because they believed they were superior to Indians. They found no explanation about the people in the New World in the Bible or other documents, so they forced the Indians to their will because they believed these indigenous people were soulless animals or beasts. Thus, during this period, Spanish colonists were mostly driven by greed and ambition (Otero, 1958). Also, at that time, Spain was living under feudalism which was transferred to America. This transference of « modus vivendi » was imposed on the indigenous population.
Regarding Indians in Bolivia, they were living in a primitive communism system and in a hierarchical society due to the Incas. Therefore, they were easily subdued by Spaniards whom they considered as Gods. (Urquidi, 1990). Considering this, the culture of submission was generated easily on both sides.
All this culture of subjugating the indigenous people in the New World began in the sixteenth century and lasted until the twentieth century (1960) with great intensity. During this period, the Bolivian society was based on inequality and a pyramidal structure in which indigenous people had more obligations than privileges. This social pyramid was constructed on the basis of 6 parameters: social power, economic power, political power, military power, religious power and knowledge power (Cajias, 2009). Among them, the most important was social power, which was based on race and noble birth. At the top of the pyramid were the Spanish settlers and their descendants, and at the bottom were mestizos (those with indigenous mothers and Spanish fathers), Indians, Zambos (one parent is indigenous and the other African slave), and slaves (Africans). This behavior of subjugation and submission on both sides was transferred from generation to generation even to the present day. We can see this culture in different spheres of the Bolivian society. For example, two workers with the same academic background, age, and same occupation are presenting a project. But one belongs to the top status (white and European last name), and one to the lowest status (dark skin and Indigenous last name). Naturally, the best project should win. However, considering the culture of submission, the worker who belonged to the higher category is the winner regardless of the other project.
This example is replicated in all fields which has had a great impact first and foremost on human capital and therefore, the country’s economic development.
I firmly believe that the culture of submission, which has been inherited from colonialism and transmitted from generation to generation, is alive and continues to influence Bolivian society as reflected in the behavior of people and their daily activities. To flip the coin to the development side we wither need to reduce or eliminate the culture of submission to generate human capital and economic development. Otherwise, we will continue living in poverty and we will be a developing country forever.