Endowments, Fiscal Federalism, and the Cost of Capital for States: Evidence from Brazil, 1891-1930

Martínez is an economist at the Banco de México. Musacchio is an associate professor and Marvin Bower fellow at Harvard Business School (corresponding author, amusacchio@hbs.edu). We would like to acknowledge the helpful comments of Lee Alston, Gaelle Brachet, Alan Dye, Zephyr Frank, Andrés Gallo, Aurora Gomez-Galvarriato, Stephen Haber, Lakshmi Iyer, Robert Margo, Noel Maurer, Kris Mitchener, David Moss, Steve Nafziger, Alberto Ortiz, Daniele Paserman, Sergio Silva, William Summerhill III, Matt Weinzierl, Eric Werker, and participants of the Harvard Economic History Tea Seminar, the Economics Department Seminar at Williams College, the Empirical Microeconomics Lunch Seminar, the Microeconomics Workshop at Boston University, and of the Conference "New Frontiers of Latin American Economic History" at Harvard University. Special thanks to Rodrigo Soares and Leonardo Monastério, who kindly shared their databases with us. Funding from this paper came from the Research and Faculty Development Fund, Harvard Business School. All errors are responsibility of the authors. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.