Would Brazil be richer today if it had been colonized by the Dutch?

The Dutch began contesting Portuguese presence in both Asia (where they for the most part won) and the Americas (Brasil, where they eventually lost) from the early 1600s. The Dutch West India Company (WOC), which had as much capital as the more famous VOC, took the northern part of Brazil, and occupied it between the late 1620s and the early 1650s.

Would Brazil be richer today if it had been colonized by the Dutch? A popular view in Brazil is that yes: the Portuguese are to blame for the underdevelopment of the country.

A one-word counterfactual should lead to some pause, though: Suriname. Not exactly the most developed of nations today (indeed, it is poorer, on per capita terms, than Brazil). Not to mention that in other regions of the world, Dutch colonization in was rather extractive, even during the ninetienth century: as this recent study about Java (Indonesia) published in the Journal of Economic History shows, “At its height in the 1850s, net transfers from the East Indies – known as the batig slot – were almost 4 percent of Dutch Gross Domestic Product and accounted for over 50 percent of total government revenue.”

One could make the argument that Suriname was not that important for the Dutch while Brazil could have been, and counterfactuals always have an element of educated guesswork to them. But we should keep these basic facts in mind.

Perhaps more importantly, it is important to keep this in mind: while it is true that Portugal gave Brazil an inferior institutional blueprint – relative to that which England gave to the USA – this was largely due to Brazil itself. Confused? well, opinions on the internet are cheap but History isn’t simple as the experts know.

There is evidence that Portugals political institutions were not worse that those of England until the mid-seventeenth century, and they in fact improved somewhat in the second half of the 17th century, when parliaments still met frequently, especially after the Restauration of a Portuguese dynasty after 1640 (as a consequence of which Brazil was then also recovered).

As Leticia Abad and I have shown, the worsening of Portugal’s political institutions from around 1700 also had consequences for Brazil which were, themselves the result of the massive quantities of Brazilian gold. As a result of that, Portugal’s economy and political institutions suffered over the eighteenth century (in a similar process to what had happened to Spain earlier), and this then fed back into the state that was being built in Brazil (and whose basic features in fundamental ways persisted into the 19th century).

In joint ongoing work with the excellent Guilherme Lambais, I am currently working on comparative living standards in historical Brazil, a matter which has implications for the above discussion, too. More news to come.