Working Paper: CEPR ID: DP15300
Authors: Fernando Arteaga; Desiree Desierto; Mark Koyama
Abstract: The trade route between Manila and Mexico was a monopoly of the Spanish Crown for more than 250 years. The Manila Galleons were ``the richest ships in all the oceans'', but much of the wealth sank at sea and remain undiscovered. We introduce a newly constructed dataset of all of the ships that travelled this route. We show formally how monopoly rents that allowed widespread bribe-taking would have led to overloading and late ship departure, thereby increasing the probability of shipwreck. Empirically, we demonstrate not only that these late and overloaded ships were more likely to experience shipwrecks or to return to port, but that such effect is stronger for galleons carrying more valuable, higher-rent, cargo. This sheds new light on the costs of rent-seeking in European colonial empires.
Keywords: corruption; rent-seeking; bribery; shipwrecks
JEL Codes: N00; N13; K00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high monopoly rents (D42) | bribe-taking (K42) |
| bribe-taking (K42) | overloading (L90) |
| bribe-taking (K42) | late departures (J26) |
| overloading (L90) | increased probability of shipwreck (R41) |
| late departures (J26) | increased probability of shipwreck (R41) |
| high monopoly rents (D42) | overloading (L90) |
| high monopoly rents (D42) | late departures (J26) |
| overloading and late departure (L90) | increased probability of shipwreck (R41) |
| late departure on shipwreck probability is stronger for lower-tonnage ships (R41) | increased probability of shipwreck (R41) |