Quality of Institutions and the Allocation of Talent: Cross‐National Evidence
Timur Natkhov & Leonid Polishchuk
Strong institutions attract talent to productive activities, whereas weak ones raise the appeal of redistribution. We find a strong positive cross‐country association between the quality of institutions and graduation of university students in science, and an even stronger negative correlation with graduation in law. These findings are robust to various specifications of empirical models. We also demonstrate that institutions dominate other factors affecting the allocation of talent. Finally, we present direct evidence that (mis)allocation of talent between productive and unproductive activities driven by institutional quality explains the discrepancy between private and public returns to education.
Arrested Development? Puerto Rico in an American Century
Journal of Economic History, September 2019, Pages 708-735
Puerto Rico became an American colony in 1898, achieving self-rule after the Great Depression. The standard view is that Puerto Rican living standards stagnated before the policy changes of the New Deal and it has lost ground on the mainland since the early 1970s. I show these claims are mistaken. Using a new GDP index for 1900 to 1940, I show that income per capita grew at impressive rates during direct American rule and Puerto Rico escaped the worst ravages of the Great Depression. In addition, I find the recent growth slowdown is partly a statistical artifact.
Urban Regimes and the Policing of Strikes in Two Gilded Age Cities: New York and Chicago
Studies in American Political Development, forthcoming
Since the 1980s, scholars have argued that during the Gilded Age urban party machines incorporated working people through the use of patronage, informal provision of personal welfare, and limited concessions, thereby eliminating sustained labor and Socialist Party alternatives and keeping workers’ militancy and assertiveness confined to the workplace. That view is challenged by a historical comparison of the policing of labor disputes in New York and Chicago. In New York, organized workers were eliminated from the governing coalition of the Swallowtail-Kelly regime that succeeded the Tweed Ring, and police routinely used coercion to defeat strikes and intimidate Socialists. In Chicago, however, labor and Socialists were part of the governing coalition of the Carter Harrison regime, and the police took a hands-off stance in many strikes. This article explores the contrast in policing and the balance of social forces in the two cities and seeks to explain the differences by examining the political settlements that concluded Reconstruction, the ethnic makeup of each city's working classes, the different characteristics of each city's labor movement, and labor's ability to mount third-party challenges — all in the context of regional variations. It concludes that historians cannot assume that workers were incorporated into machines in this period.
High-Profile Criminal Violence: Why Drug Cartels Murder Government Officials and Party Candidates in Mexico
Guillermo Trejo & Sandra Ley
British Journal of Political Science, forthcoming
This article explains a surprising wave of lethal attacks by drug cartels against hundreds of local elected officials and party candidates in Mexico, 2007–2012. These attacks are puzzling because criminal organizations tend to prefer the secrecy of bribery over the publicity of political murder. Scholars suggest that war drives armed actors to attack state authorities in search of protection or rents. Using original data on high-profile attacks in Mexico, the authors show that war need arguments underexplain violence. Focusing on political opportunities, they suggest that cartels use attacks to establish criminal governance regimes and conquer local governments, populations and territories. The study presents quantitative and qualitative evidence showing that cartels took advantage of Mexico's political polarization and targeted subnational authorities who were unprotected by their federal partisan rivals. Cartels intensified attacks during subnational election cycles to capture incoming governments and targeted geographically adjacent municipalities to establish control over large territories. The findings reveal how cartels take cues from the political environment to develop their own de facto political domains through high-profile violence. These results question the widely shared assumption that organized criminal groups are apolitical actors.
Clans, entrepreneurship, and development of the private sector in China
Journal of Comparative Economics, forthcoming
This paper examines the role of clans in China's unprecedented development of the private sector. Although with no well-developed financial and legal systems, China witnesses a boom of private sector, which has contributed to most of its economic growth during the past three decades. Using inter-census population survey and economic census data, I find that the clan is positively associated with the likelihood of entrepreneurship and the share of economy in the private sector. Exploring possible mechanisms, I find that the clan helps privately-owned enterprises overcome financing constraints and escape from local government's “grabbing hand”. In addition, the clan is significantly related to a set of individual values, which are arguably relevant for private business. Finally, I find that the support of clans for private business is limited as clans deter private businesses from growing into large firms. The results also suggest that the role of clans reduces as formal institutions develop.
Subjective well-being in China’s changing society
William Clark, Daichun Yi & Youqin Huang
Proceedings of the National Academy of Sciences, 20 August 2019, Pages 16799-16804
There is now recognition that a population’s overall level of well-being is defined not just by income and wealth. Where we live and who we interact with are likely to be equally important in our overall levels of satisfaction with our lives. This thinking has stimulated studies of subjective well-being, or happiness, at both national and local scales. These studies suggest that where you live does matter, although it is health and family status that have the most direct effects on well-being. In this study, we use a detailed dataset on well-being from the China Household Finance Survey to reexamine well-being across China, where profound socioeconomic changes are taking place. The study controls for self-reported health and examines subjective well-being across extensive and varied Chinese urban and rural environments. We find that the earlier pessimism about China’s well-being, which emphasized declining happiness, may be misplaced. We make two contributions: first, we show a rising level of subjective well-being, and second, we show that there is a narrowing gap in well-being across different social indicators. Methodologically, we bring in the perspectives of both social capital and geographic context.
Life history and the cultural evolution of parenting: Pathogens, mortality, and birth across the globe
Evolutionary Behavioral Sciences, forthcoming
Life history theory predicts that parents in adverse environments adopt faster reproductive strategies. Supporting this idea, a global study of more than 150 nations showed that in nations with higher pathogen loads, and thus higher infant mortality rates, the average woman begins having children at a younger age and gives birth to more children. These findings hold true after controlling for demographic variables such as national wealth (per capita GDP). Historical pathogen loads and recent infant mortality rates also predict changes in reproductive strategies over 6 decades. Furthermore, consistent with Schmitt (2005), nations in which women are in the statistical minority relative to men also exhibit slower reproductive strategies and higher parental investment. Presumably, this last finding is due to the greater social power women have in their marriages under such conditions. This report supports key predictions of life history theory and parental investment theory in the most comprehensive, methodologically rigorous global tests yet conducted.
The Slow Road from Serfdom: Labor Coercion and Long-Run Development in the Former Russian Empire
Johannes Buggle & Steven Nafziger
Review of Economics and Statistics, forthcoming
This paper examines the long-run economic consequences of Russian serfdom. Employing data on the intensity of labor coercion just prior to emancipation in 1861, we document that a 25 percentage point increase in historical serfdom (one SD) reduces household expenditure today by up to 17%. We then provide evidence on the persistence of this relationship by studying city populations over the period 1800 - 2002. Exploring mechanisms, our findings suggest that less urban agglomeration and slower industrial development in areas with a greater degree of serfdom perpetuated the negative effects of forced labor before, during, and after the Soviet period.
French and British Colonial Legacies in Education: Evidence from the Partition of Cameroon
Journal of Economic History, September 2019, Pages 628-668
Cameroon was partitioned between France and the United Kingdom after WWI and then reunited after independence. I use this natural experiment to investigate colonial legacies in education, using a border discontinuity analysis of historical census microdata from 1976. I find that men born in the decades following partition had, all else equal, one more year of schooling if they were born in the British part. This positive British effect disappeared after 1950, as the French increased education expenditure, and because of favoritism in school supply towards the Francophone side after reunification. Using 2005 census microdata, I find that the British advantage resurfaced more recently: Cameroonians born after 1970 are more likely to finish high school, attend a university, and have a high-skilled occupation if they were born in the former British part. I explain this result by the legacy of high grade repetition rates in the French-speaking education system and their detrimental effect on dropout.
Land rights, rental markets and the post-socialist cityscape
Paul Castañeda Dower & William Pyle
Journal of Comparative Economics, forthcoming
Inefficiently organized, factory-dominated cityscapes have been one of the more enduring legacies of the twentieth century experiment with socialist central planning in Eastern Europe and the Soviet Union. Drawing on a unique survey of large, formerly state-owned urban industrial firms in Russia, we explore how land tenure reforms affect the pace at which this legacy is being erased. For various historical, political, and economic reasons, there is substantial variation across firms as to their ownership of the land on which they sit. Despite facing no additional formal constraints, those that do not own their plots rent them out at a lower frequency than those that have acquired private tenure to their land. The privatization of plots, in other words, promotes the development of a rental market that transfers land use rights away from socialist-era industrial users. We address the potential endogeneity of land tenure using a measure of regional variation in urban land policy and Communist party vote shares as instrumental variables.