We use variation in historical state centralization to examine the long-term impact of institutions on cultural norms. The Kuba Kingdom, established in Central Africa in the early 17th century by King Shyaam, had more developed state institutions than the other independent villages and chieftaincies in the region. It had an unwritten constitution, separation of political powers, a judicial system with courts and juries, a police force, a military, taxation, and significant public goods provision. Comparing individuals from the Kuba Kingdom to those from just outside the Kingdom, we find that centralized formal institutions are associated with weaker norms of rule following and a greater propensity to cheat for material gain. This finding is consistent with recent models where endogenous investments to inculcate values in children decline when there is an increase in the effectiveness of formal institutions that enforce socially desirable behavior. Consistent with such a mechanism, we find that Kuba parents believe it is less important to teach children values related to rule-following behaviors.
We present evidence that the traditional structure of society is an important determinant of the scope of trust today. Within Africa, individuals belonging to ethnic groups that organized society using segmentary lineages exhibit a more limited scope of trust, measured by the gap between trust in relatives and trust in non-relatives. This trust gap arises because of lower levels of trust in non-relatives and not higher levels of trust in relatives. A causal interpretation of these correlations is supported by the fact that the effects are primarily found in rural areas where these forms of organization are still prevalent.
Across human societies, one sees many examples of deeply rooted and widely-held beliefs that are almost certainly untrue. Examples include beliefs about witchcraft, magic, ordeals, and superstitions. Why are such incorrect beliefs so prevalent and how do they persist? We consider this question through an examination of superstitions and magic associated with conflict in the Eastern Democratic Republic of the Congo. Focusing on superstitions related to bullet-proofing, we provide theory and case-study evidence showing how these incorrect beliefs persist. Although harmful at the individual-level, we show that they generate Pareto efficient outcomes that have group-level benefits.
We use a variant of the Implicit Association Test (IAT) to examine individuals’ implicit attitudes towards various ethnic groups. Using a population from the Democratic Republic of Congo, we find that the IAT measures show evidence of an implicit bias in favor of one’s own ethnicity. Individuals have implicit views of their own ethnic group that are more positive than their implicit views of other ethnic groups. We find this implicit bias to be quantitatively smaller than the (explicit) bias one finds when using self-reported attitudes about different ethnic groups.
Fair Trade is a labeling initiative aimed at improving the lives of the poor in developing countries by offering better terms to producers and helping them to organize. Whether Fair Trade can achieve its intended goals has been hotly debated in academic and policy circles. In particular, debates have been waged about whether Fair Trade makes "economic sense" and is sustainable in the long run. The aim of this article is to provide a critical overview of the economic theory behind Fair Trade, describing the potential benefits and potential pitfalls. We also provide an assessment of the empirical evidence of the impacts of Fair Trade to date.
We study the effect of U.S. food aid on conflict in recipient countries. Our analysis exploits time variation in food aid shipments due to changes in U.S. wheat production and cross-sectional variation in a country's tendency to receive any U.S. food aid. According to our estimates, an increase in U.S. food aid increases the incidence and duration of civil conflicts, but has no robust effect on inter-state conflicts or the onset of civil conflicts. We also provide suggestive evidence that the effects are most pronounced in countries with a recent history of civil conflict.
We provide evidence that a history of democracy at the local level is associated with contemporary democracy at the national level. Auxiliary estimates show that a tradition of local democracy is also associated with attitudes that favor democracy, with better quality institutions, and higher level of economic development.
Using data on U.S. intra-ﬁrm and arm’s-length imports for 5,705 products imported from 220 countries, we examine the determinants of the share of U.S. imports that are intra-ﬁrm. We examine two predictions that arise from Antràs (2003), Antràs & Helpman (2008) and Antràs & Helpman (2004). First, we ﬁnd that, consistent with the implicit logic of Antràs (2003) and the explicit predictions of Antràs & Helpman (2008), vertical integration is increasing in the importance of non-contractible headquarter inputs relative to non-contractible supplier inputs. In other words, we show that only non-contractible headquarter inputs affect the ﬁrm’s make-or-buy decision. Second, we also provide empirical support for the Antràs & Helpman (2004) prediction that intra-ﬁrm trade is largest where non-contractible headquarter inputs are important and productivity is high.
We exploit the recent declassification of CIA documents and examine whether there is evidence of US power being used to influence countries’ decisions regarding international trade. We measure US influence using a newly constructed annual panel of CIA interventions that were successful at installing and supporting leaders during the Cold War. Our presumption is that the US had greater influence over foreign leaders that were installed and backed by the CIA. We show that following successful CIA interventions there was an increase in foreign-country imports from the US, but there was no similar increase in foreign-country exports to the US. Further, the increase in US exports was concentrated in industries which the US had a comparative disadvantage in producing, not a comparative advantage. This is consistent with US influence being used to create a larger foreign market for American products. Our analysis is able to rule out decreased bilateral trade costs, changing political ideology, and an increased supply of US loans and grants as alternative explanations. We provide evidence that the increase in US exports arose through direct purchases of US products by foreign governments.
The study examines the historical origins of existing cross-cultural differences in beliefs and values regarding the appropriate role of women in society. We test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution of gender norms. We find that, consistent with existing hypotheses, the descendants of societies that traditionally practiced plough agriculture today have less equal gender norms, measured using reported gender-role attitudes and female participation in the workplace, politics and entrepreneurial activities. Our results hold looking across countries, across districts within countries, and across ethnicities within districts. To test for the importance of cultural persistence, we examine the children of immigrants living in Europe and the United States. We find that even among these individuals, all born and raised in the same country, those with a heritage of traditional plough use exhibit less equal beliefs about gender roles today.
This article discusses the importance of accounting for cultural values and beliefs when studying the process of historical economic development. A notion of culture as heuristics or rules-of-thumb that aid in decision making is described. Because cultural traits evolve based upon relative fitness, historical shocks can have persistent impacts if they alter the costs and benefits of different traits. A number of empirical studies confirm that culture is an important mechanism that helps explain why historical shocks can have persistent impacts; these are reviewed here. As an example, I discuss the colonial origins hypothesis (Acemoglu, Johnson and Robinson, 2001), and show that our understanding of the transplantation of European legal and political institutions during the colonial period remains incomplete unless the values and beliefs brought by European settlers are taken into account. It is these cultural beliefs that formed the foundation of the initial institutions that in turn were key for long-term economic development.
We show that geography, through its impact on history, can have important effects on current economic development. The analysis focuses on the historic interaction between ruggedness and Africa’s slave trades. Although rugged terrain hinders trade and most productive activities, negatively affecting income globally, within Africa rugged terrain afforded protection to those being raided during the slave trades. Since the slave trades retarded subsequent economic development, within Africa ruggedness has also had a historic indirect positive effect on income. Studying all countries worldwide, we estimate the differential effect of ruggedness on income for Africa. We show that the differential effect of ruggedness is statistically significant and economically meaningful, it is found in Africa only, it cannot be explained by other factors like Africa’s unique geographic environment, and it is fully accounted for by the history of the slave trades.
We show that current differences in trust levels within Africa can be traced back to the trans-Atlantic and Indian Ocean slave trades. Combining contemporary individual-level survey data with historic data on slave shipments by ethnic group, we find that individuals whose ancestors were heavily raided during the slave trade are less trusting today. Evidence from a variety of identification strategies suggest that the relationship is causal. Examining causal mechanisms, we show that most of the impact of the slave trade is through factors that are internal to the individual, such as cultural norms, beliefs, and values.
We exploit regional variation in suitability for cultivating potatoes, together with time variation arising from their introduction to the Old World from the Americas, to estimate the impact of potatoes on Old World population and urbanization. Our results show that the introduction of the potato was responsible for a signicant portion of the increase in population and urbanization observed during the 18th and 19th centuries. According to our most conservative estimates, the introduction of the potato accounts for approximately one-quarter of the growth in Old World population and urbanization between 1700 and 1900. Additional evidence from within-country comparisons of city populations and adult heights also conrm the cross-country findings.
We show that the “skill bias” of a country’s tariff structure is positively correlated with long-term per capita GDP growth. Testing for causal mechanisms, we find evidence consistent with the existence of real benefits from tariffs focused in skill-intensive industries. However, this only accounts for a quarter of the total correlation between skill-biased tariffs and growth. Turning to alternative explanations we extend the standard Grossman-Helpman “protection-for-sale" model and show how the skill bias of tariffs can reflect the extent of domestic rent-seeking activities in the economy. We provide evidence that the remaining variation is explained by this endogeneity
This article provides a survey of a growing body of empirical evidence that points toward the important long-term effects that historic events can have on economic development. The most recent studies, using microlevel data and more sophisticated identification techniques, have moved beyond testing whether history matters and attempt to identify exactly why history matters. The most commonly examined channels include institutions, culture, knowledge and technology, and movements between multiple equilibria. The article concludes with a discussion of the questions that remain and the direction of current research in the literature.
Can part of Africa’s current underdevelopment be explained by its slave trades? To explore this question, I use data from shipping records and historical documents reporting slave ethnicities to construct estimates of the number of slaves exported from each country during Africa’s slave trades. I find a robust negative relationship between the number of slaves exported from a country and current economic performance. To better understand if the relationship is causal, I examine the historical evidence on selection into the slave trades and use instrumental variables. Together the evidence suggests that the slave trades had an adverse effect on economic development.