Levels of development vary widely within countries in the Americas.We argue that part of this variation has its roots in the colonial era, whencolonizers engaged in different economic activities in different regions of acountry.We present evidence consistent with the view that “bad” activities(those that depended heavily on labor exploitation) led to lower economicdevelopment today than “good” activities (those that did not rely on laborexploitation). Our results also suggest that differences in political representation(but not in income inequality or human capital) could be theintermediating factor between colonial activities and current development.