Going Modern
The long-run effects of childhood exposure to market access shocks: Evidence from the US railroad network expansion
Jeff Chan
Explorations in Economic History, forthcoming
Abstract:
In this paper, I use the expansion of the US railroad network from 1900 to 1910 and the resulting spatial variation in increased market access to investigate whether economic shocks that occur during childhood have long-run ramifications on later-life outcomes, and the channels through which such effects manifest. I link individuals across the 1900, 1910, and 1940 full-count US Censuses and incorporate an instrumental variable strategy to help isolate the causal effect of market access. I find that, in the short run, sons are less likely to be literate and have more siblings. In the long-run, these sons then become less likely to be well-educated and earn lower incomes. The results of this paper shed light on the mechanisms through which railroad-induced market access and other economic shocks during childhood can impact individuals even in later life.
Sprouting Cities: How Rural America Industrialized
Fabian Eckert, John Juneau & Michael Peters
NBER Working Paper, January 2023
Abstract:
We study the joint process of urbanization and industrialization in the US economy between 1880 and 1940. We show that only a small share of aggregate industrialization is accounted for by the relocation of workers from remote rural areas to industrial hubs like Chicago or New York City. Instead, most sectoral shifts occurred within rural counties, dramatically transforming their sectoral structure. Most industrialization within counties occurred through the emergence of new ”factory” cities with notably higher manufacturing shares rather than the expansion of incumbent cities. In contrast, today’s shift towards services seems to benefit large incumbent cities the most.
Is democracy good for growth? -- Development at political transition time matters
Di Sima & Fali Huang
European Journal of Political Economy, forthcoming
Abstract:
Is democracy a better political regime for economic prosperity than autocracy? This paper shows that the answer depends on the initial economic development level during the democratic transition when the foundation of institutions was laid. Democracy facilitates growth only in countries that already have adequate development at transition time. These countries are more likely to create and sustain growth-enhancing institutions than others. Without appropriate development, democracy does not improve growth; this applies to about 40% of the third-wave democratized countries. These results are based on a sample of 153 countries in 1960-2010 and robust to various specifications and endogeneity issues.
The influence of schooling on performance in chess and at the Olympics
David Forrest, J.D. Tena & Carlos Varela-Quintana
Empirical Economics, February 2023, Pages 959–982
Abstract:
At the macro-level, it is hard to test the hypothesis that increased schooling in a country will raise labour productivity but sectoral analyses may be tractable. In sports, output is homogenous in that countries’ achievements are measurable in the same way. We examine country performances at the Chess Olympiad and the Olympic Games, contrasting tournaments where players in the first use only their minds but most in the second supply substantial physical effort or work with costly physical capital. Modelling success in either leads to a set of results familiar from sports literature: country performance depends on economic resources, represented by population size and per capita income. Supplementary variables capture over-performance by communist/ former communist countries. We then introduce a measure of average years of schooling. This significantly reduces the role of income, especially in chess. It also takes power away from the ‘communist’ variables, especially at the Olympics. These results suggest that much of any effect from income is mediated through schooling: investment in education is associated with elevated productivity. Increased productivity is observed in both settings, one a knowledge-intensive sub-sector and the other dependent to a significant extent on either raw physical strength or expensive capital input.
Two-dimensional constrained chaos and industrial revolution cycles
Makoto Yano & Yuichi Furukawa
Proceedings of the National Academy of Sciences, 31 January 2023
Abstract:
Since the 1760s, at least three industrial revolutions have occurred. To explain this phenomenon, we introduce two-dimensional (2D) constrained chaos. Using a model of innovation dynamics, we show that an industrial-revolution-like technology burst, driven by investment/saving motives for R&D activities, recurs about every one hundred years if the monopolistic use of a new technology lasts about 8 y.
Weak States and the Commons: Fisheries and Economic Development in the Gaspesian Peninsula circa 1830
Vincent Geloso & Félix Foucher-Paquin
George Mason University Working Paper, January 2023
Abstract:
The inefficiencies of common property fisheries are well-known to economists. To avoid over-exploitation, they propose multiple forms of government solutions like taxes, quotas and the enforcement of property rights regimes designed to avoid over-harvesting. However, can there be efficient arrangements under statelessness or in the presence of weak states? One such example is the Gaspesian Peninsula (in the Canadian province of Quebec) during the first half of the 19th century. There, a single firm (the Charles Robin Company) came to dominate the market and it was able to effectively to restrict entry. In this paper, we unveil that it was able to do so by reducing the prices of imported goods that it would give to local fishermen in exchange for a part of their catch. This had the effect of deterring fishermen to contract with other merchants as well as deterring other merchants from entering the market. It also had the effect of making the region, contrary to what historians depict, richer than most regions of Canada at the time. We take this as an example of the ability to deal with commons problems in the presence of weak states.
Resource development and governance declines: The case of the Chad–Cameroon petroleum pipeline
Ryan Abman & Gabrial Longbrake
Energy Economics, January 2023
Abstract:
In this paper, we study the effects of the Chad–Cameroon Petroleum Development and Pipeline Project that allowed Chad to begin producing and exporting oil. The project was financed under heavy restrictions by the World Bank in an attempt to avert the resource curse. The majority of revenue from the resource was to be directed back into development programs with minimal government discretion. Using synthetic control matching and synthetic difference in differences, we find that oil production had immediate and persistent negative impacts on the quality of governance, increased GDP per capita, but had little lasting effects on measured development outcomes such as infant mortality and health spending. Our findings offer new empirical evidence for the political resource curse and suggest that the World Bank’s experiment to impose rules over management of resource rents was not sufficient to ensure widespread benefits from natural-resource wealth.
Was Marshall Right? Managerial Failure and Corporate Ownership in Edwardian Britain
Michael Aldous, Philip Fliers & John Turner
Journal of Economic History, forthcoming
Abstract:
Alfred Marshall argued that the malaise of public companies in Edwardian Britain was due to the separation of ownership from control and a lack of professional management. In this paper, we examine the ownership and control of the c.1,700 largest British companies in 1911. We find that most public companies had a separation of ownership and control, but that this had little effect on their performance. We also find that manager characteristics that proxy for amateurism are uncorrelated with performance. Ultimately, our evidence suggests that, if Marshall was correct in identifying a corporate malaise in Britain, its source lay elsewhere.
Soil zinc deficiency and child stunting: Evidence from Nepal
Leah Bevis, Kichan Kim & David Guerena
Journal of Health Economics, January 2023
Abstract:
We examine the negative child health impacts of soil zinc (Zn) deficiency in Nepal. Soil Zn deficiency limits both crop yields and the Zn concentration in food crops, leading many to speculate that it underlies human Zn deficiency and child stunting, globally and particularly in South Asia. We find strong evidence that soil Zn deficiency does have a causal impact on child stunting in Nepal’s Tarai region, the breadbasket of the country. Using causal bounds, we find that a 1 part per million increase in plant-available soil Zn -- achievable with application of Zn-enriched fertilizer -- decreases child stunting by between 1 and 7.5 percentage points. Multiple statistical sensitivity tests indicate that this relationship is unlikely to be manufactured by omitted, relevant variables.
Do good carefully: The long-term effects of low-dose DDT exposure in early childhood on education, marriage and employment
Simon Chang & Kamhon Kan
Health Economics, forthcoming
Abstract:
It is well known that malaria has serious adverse effects on humans. Yet, little is known as to how dichlorodiphenyltrichloroethane (DDT), which is still used to control malaria, may affect human socioeconomic outcomes in the long run. Utilizing the large-scale indoor residual spraying of low-dose DDT in Taiwan in the 1950s, we estimated the long-term effects of low-dose DDT exposure in early childhood on education, marriage and employment in adulthood. Our identification hinges on the unexpected extension of DDT spraying after malaria had already been largely brought under control. We found that even at a very low dosage, DDT exposure still resulted in discernible negative effects on education and marriage. For employment, although no effect on the probability of working was detected, people exposed to more sprayings in childhood were more likely to work in the agricultural sector that typically requires less human capital.
Program targeting with machine learning and mobile phone data: Evidence from an anti-poverty intervention in Afghanistan
Emily Aiken et al.
Journal of Development Economics, forthcoming
Abstract:
Can mobile phone data improve program targeting? By combining rich survey data from a “big push” anti-poverty program in Afghanistan with detailed mobile phone logs from program beneficiaries, we study the extent to which machine learning methods can accurately differentiate ultra-poor households eligible for program benefits from ineligible households. We show that machine learning methods leveraging mobile phone data can identify ultra-poor households nearly as accurately as survey-based measures of consumption and wealth; and that combining survey-based measures with mobile phone data produces classifications more accurate than those based on a single data source.
Containing Large-Scale Criminal Violence Through Internationalized Prosecution: How the Collaboration Between the CICIG and Guatemala’s Law Enforcement Contributed to a Sustained Reduction in the Murder Rate
Guillermo Trejo & Camilo Nieto-Matiz
Comparative Political Studies, forthcoming
Abstract:
How do post-conflict societies contain large-scale criminal violence when state security forces that committed atrocities during a civil war remain unpunished and become key players in the criminal underworld? This article explores the impact on violence reduction of internationalized prosecution (IP): cooperation agreements between an international organization and a country’s public prosecutors to dismantle state-criminal networks through judicial action. We assess the IP process by which the United Nations–sponsored International Commission Against Impunity in Guatemala (CICIG) and Guatemala’s law enforcement dismantled over 70 criminal structures led by death squads and the civil war military establishment. Using synthetic control models, we estimate that Guatemala’s IP process plausibly prevented the occurrence of between 20,000 and 30,000 homicides, from 2008 until 2019. Case studies show how IP contributed to violence reduction by removing criminal structures and deterring both state-criminal collusion and the state’s use of iron-fist militarized policies against crime.