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Are institutions shaped by factor endowments? Labour-coercion institutions such as serfdom and slavery were ascribed by Domar to high land-labour ratios. But historical evidence appeared to refute this hypothesis. We analyze the relationship between factor proportions and serfdom using data for over eleven thousand serf villages in eighteenth-century Bohemia (the Czech lands). We hold constant political-economy variables by analyzing a specific serf society, and also control for village and estate characteristics that may have obscured the impact of factor endowments in previous studies. The net effect of higher land-labour ratios, we find, was to increase labour coercion. The impact intensified when landlords extracted labour in human-animal teams, and diminished as land-labour ratios rose. Outside options in the urban sector exerted no effect. Controlling for other factors, we conclude, institutions are indeed partly shaped by economic fundamentals.
