Developing News
Physiological constraints and the transition to growth: Implications for comparative development
Carl-Johan Dalgaard, Jakob Madsen & Holger Strulik
Journal of Economic Growth, September 2021, Pages 241–289
Abstract:
It is a well known fact that economic development and distance to the equator are positively correlated variables in the world today. It is perhaps less well known that as recently as 1500 C.E. it was the other way around. The present paper provides a theory of why the ‘latitude gradient’ changed sign in the course of the last half millennium. In particular, we develop a dynamic model of economic and physiological development in which households decide upon the number and nutrition of their offspring. In this setting we demonstrate that relatively high metabolic costs of fertility, which may have emerged due to positive selection towards greater cold tolerance in locations away from the equator, would work to stifle economic development during pre-industrial times, yet allow for an early onset of sustained growth. As a result, the theory suggests a reversal of fortune whereby economic activity gradually shifts away from the equator in the process of long-term economic development. Our empirical results give supporting evidence for our hypothesis.
A time to print, a time to reform
Lars Boerner, Jared Rubin & Battista Severgnini
European Economic Review, forthcoming
Abstract:
The public mechanical clock and movable type printing press were arguably the most important and complex technologies of the late medieval period. We posit that towns with clocks became upper-tail human capital hubs — clocks required extensive technical know-how and fine mechanical skill. This meant that clock towns were in position to adopt the printing press soon after its invention in 1450, as presses required a similar set of mechanical and technical skills to operate and repair. A two-stage analysis confirms this conjecture: we find that clock towns were 34–40 percentage points more likely to also have a press by 1500. The press, in turn, helped facilitate the spread of the Protestant Reformation. A three-stage instrumental variables analysis indicates that the press influenced the adoption of Protestantism, while the clock’s effect on the Reformation was mostly indirect. Our analysis therefore suggests that the mechanical clock was responsible — directly and indirectly — for two of the most important movements in the making of the modern world: the spread of printing and the Reformation.
Historical migration and contemporary health
Thomas Barnebeck Andersen et al.
Oxford Economic Papers, July 2021, Pages 955–981
Abstract:
We argue that migration during the last 500 years induced differences in contemporary health outcomes. The theory behind our analysis builds on three physiological facts. First, vitamin D deficiency is directly associated with higher risk of all-cause mortality. Second, the ability of humans to synthesize vitamin D from sunlight (UV-R) declines with skin pigmentation. Third, skin pigmentation is the result of an evolutionary compromise between higher risk of vitamin D deficiency and lower risk of skin cancer. When individuals from high UV-R regions migrate to low UV-R regions, the risk of vitamin D deficiency rises markedly. We develop a measure that allows us to empirically explore the aggregate health consequences of such migration in a long historical perspective. We find that the potential risk of vitamin D deficiency induced by migration during the last half millennium is a robust predictor of present-day aggregate health indicators.
Economic Development and Modernization in Africa Homogenize National Cultures
Michael Minkov, Anneli Kaasa & Christian Welzel;
Journal of Cross-Cultural Psychology, forthcoming
Abstract:
The nation-building literature of the early 1960s argued that decolonized countries need to overcome pre-colonial ethnic identities and generate national cultures. Africa is the most critical test case of this aspect of modernization theory as it has by far the largest ethnolinguistic fractionalization. We use data from the Afrobarometer to compare the cultures of 85 ethnolinguistic groups, each represented by at least 100 respondents, from 25 African countries. We compared these groups and their nations on items that address cultural modernization and emancipation: ideologies concerning inclusive-exclusive society (gender egalitarianism, homophobia, and xenophobia), submissiveness to authority, and the societal role of religion. Previous research has shown that these are some of the most important markers of cultural differences in the modern world. Hierarchical cluster analysis yielded very homogeneous national clusters and not a single ethnolinguistic cluster cutting across national borders (such as Yoruba of Benin and Yoruba of Nigeria, Ewe of Ghana, and Ewe of Togo, etc.). Only three ethnolinguistic groups (3.5%) remained unattached to their national cluster, regardless of the clustering method. The variation between nations (F values) was often considerably greater than the variation between ethnolinguistic groups. Medial distances between the groups of each country correlated highly with GDP per person (r = −.54), percentage men employed in agriculture (r = .64), percentage men employed in services (r = −.63), and phone subscriptions per person (r = −.61). In conclusion, economic development and modernization diminish cultural differences between ethnolinguistic groups within nations, highlighting those between them.
Foreign aid, public investment, and the informal economy
Santanu Chatterjee, Mark Kelly & Stephen Turnovsky
Economic Inquiry, forthcoming
Abstract:
This paper examines the absorption of foreign aid in the presence of formal and informal production. Calibrating a two-sector open economy model to 67 aid-recipient countries for 1990–2019, we show that an increase in foreign aid drives resources into the informal sector, and away from the formal sector. With untied aid, the expansion of the informal sector can lead to an economic contraction through the Dutch Disease effect. An economic expansion with an increase in the share of formal production can be attained by re-allocating existing aid to public investment rather than an increase in the aggregate level of aid.
The curse of modernization? Western fast food and Chinese children's weight
Nancy Kong & Weina Zhou
Health Economics, forthcoming
Abstract:
The income-adjusted price of fast food in China is five times more than in the United States, yet we show that the introduction of Western fast-food restaurants to China still leads to significant weight gain in children. Using the community-year-level presence of Western fast-food outlets, difference-in-differences estimations find a 4.8-percentage-point increase in the prevalence of overweight/obese children after controlling for child and year fixed effects. The effect decreases at a distance of 3–4 km from a fast-food restaurant, and we find no further weight gain 2 years after the restaurant's introduction. The underweight rate is not affected by fast-food introduction. The increase in fat share of energy intake serves as the channel for weight gain. Children in high-income families, younger than 11 years, and girls are more affected than other Chinese children.
Inappropriate Technology: Evidence from Global Agriculture
Jacob Moscona & Karthik Sastry
MIT Working Paper, August 2021
Abstract:
An influential hypothesis explaining the persistence of global productivity differences is that frontier technologies are finely tuned to the local conditions of the high-income countries that develop them and inappropriate for application elsewhere. This paper studies how environmental differences between frontier innovators and the rest of the world shape the global diffusion, adoption, and productivity consequences of agricultural technology. Our empirical design uses differences in the presence of unique crop pests and pathogens (CPPs) as a instrument for the appropriateness of crop-specific biotechnology developed in one country and applied in another. We first find that inappropriateness predicted by CPP differences reduces cross-country transfer of novel biotechnology. We next find that inappropriateness relative to frontier innovators reduces adoption of improved seeds and crop-level output. Our estimates suggest that the inappropriateness of the contemporary frontier reduces global productivity by 50% and increases cross-country dispersion in log productivity by 15% relative to a world in which technology were equally productive in all contexts. We use our framework to study how historical and predicted changes in the geography of innovation affect the global distribution of agricultural productivity.
Roman Transport Network Connectivity and Economic Integration
Matthias Flückiger et al.
Review of Economic Studies, forthcoming
Abstract:
We show that the creation of the first integrated multi-modal pan-European transport network during Roman times influences economic integration over two millennia. Drawing on spatially highly disaggregated data on excavated Roman ceramics, we document that contemporary interregional trade was influenced by connectivity within the network. Today, these connectivity differentials continue to influence integration as approximated by cross-regional firm investment behaviour. Continuity is partly explained by selective infrastructure routing and cultural integration due to bilateral convergence in preferences and values. We show that our results are Roman-connectivity specific and do not reflect pre-existing patterns of exchange using pre-Roman trade data.
L’histoire immobile? A reappraisal of French economic growth using the demand-side approach, 1280–1850
Leonardo Ridolfi & Alessandro Nuvolari
European Review of Economic History, August 2021, Pages 405–428
Abstract:
We construct a new series of GDP per capita for France for the period 1280–1850 using the demand-side approach. Our estimates point to a long-run stability of the French economy with a very gradual acceleration toward modern economic growth. In comparative perspective, our new estimates suggest that England and France were characterized by similar levels of economic performance until the second half of the seventeenth century. It is only after that period that the English economy “forges ahead” in a consistent way.
Local Technology Adoption and Innovation: The Establishment of U.S. Airmail and the Organization of Aviation Innovation
Eunhee Sohn, Robert Seamans & Daniel Sands
Georgia Tech Working Paper, June 2021
Abstract:
This paper explores how technology adoption can shape local innovative activity in the context of the early 20th century rollout of airmail in the United States. Our theoretical framework highlights the mechanism of technological feedback and market incentives through which technology adoption induces local innovation, as well as the role of regional domain-specific capabilities in this process. Using our novel dataset of early 20th-century patents, we quantitatively examine these issues by measuring the effect of local airmail upon aviation innovation. Our results suggest that the establishment of an airmail route in a given county led to an increase in local aviation patenting by approximately 32%. Both individual and corporate inventors in treated counties had higher rates of aviation patenting in broad and diverse areas of aviation technology. We also find that the effect of airmail adoption was stronger in the treated counties with pre-existing local capabilities that specifically catered to, or could be readily applied to, the focal technological domain. This work contributes to the academic literature on antecedents and consequences of technology adoption and innovation. Our findings are also relevant for present-day managers and policymakers who are navigating the potential costs and benefits of new technology adoption.