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The Historical Legacy of (Pre?)Colonial Indigenous Settlements in Mexico

What is the long-term impact of pre-colonial ethnic institutions? I examine the consequences of the fragmentation of local indigenous communities produced by Spanish rule in Mexico. To do this I make use of unique data from 18th century pueblos — the basis of modern-day counties — to study the institutional impact that the formation of these pueblos had on current development in Mexico. I find that after controlling for alternative mechanisms, counties encompassing more historical pueblos, are more developed, and have less poverty, but are more unequal today. The effects are more latent in places where pre-hispanic roots are deeper (historical Mesoamerica and high altitude areas), suggesting the institutional impact has a pre-colonial basis.