The Spanish Origins of Extractive Institutions in the Philippines


  • Prince Christian Cruz

    1. University of the Philippines
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    • The author benefitted greatly from comments from Emmanuel de Dios, Raul Fabella, and Stephen Haggard. He would also like to thank Caroline Patacsil, Ruth Francisco, and classmates in the School of Economics, University of the Philippines for comments and suggestions. A version of this paper was presented in the 12th East Asian Economics Association (EAEA) International Convention in Seoul, South Korea.


Why did the Spanish colonisers of the Philippines establish extractive institutions? Using an explicit rational choice framework, the article examines the demand for institutions of Spanish settlers during the conquest period. It provides a framework for analysing the incentive structure faced by individuals that lead them to demand, create, and preserve certain types of institutions. The article argues that extractive institutions were demanded and supplied to minimise the uncertainty brought by high mortality and the relatively low wealth in the Philippines.