Blood Rubber: The Effects of Labor Coercion on Institutions and Coercion in the DRC

We examine how historical exposure to extractive institutions affects long-term development in the case of the Congo Free State (CFS). The CFS granted concessions to private companies that used violent tactics to collect rubber. Local chiefs were co-opted into supporting the rubber regime, and individuals struggled to fulfill mandated quotas as natural rubber became increasingly scarce. We use a geographic regression discontinuity design along the former concession boundaries to show that greater exposure to extractive institutions causes significantly worse education, wealth and health outcomes. We then use survey and experimental data collected along a former concession boundary to examine how the effects of extractive institutions persist through local institutional quality and cultural norms. Consistent with their historical co-option by the concession companies, we find that chiefs within the former concessions are of ‘lower quality’ and are less accountable to their constituents. However, we find that individuals within the concessions are more trusting and have stronger norms of redistribution. The results demonstrate how historical events of short duration can have long-lasting effects on institutions and cultural norms.