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Thread: Lessons for development from two natural experiments of history

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    Lessons for development from two natural experiments of history

    Link:

    https://papers.ssrn.com/sol3/papers....act_id=2857893

    Abstract:

    This study uses two natural experiments from Polish history, municipal level data and regression discontinuity design to consider the relative role of institutions and culture for long-run development. The first experiment documents the persistent effects of institutions and culture on the development of the 19th century partition of Poland between the Prussian, Russian and Austrian empires. Evidence is presented that these borders are exogenous. The former Prussian partition significantly outperforms the Russian and Austrian based on tax data. We find that agrarian reforms in the 19th century sent the three parts on different trajectories to modern development. As a result, half of the households are still rural in the Russian and Austrian partitions compared to a fifth in the Prussian. The partitions differentiated the cultures between the three parts as well. To distinguish the role of institutions and culture we exploit the second experiment of history - Stalin's forced migration movements after World War II. This enables us to exclude culture as a channel of persistence and demonstrate the role of institutions in long - run development. Robustness tests indicate the distinct nature of the historic borders.

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    The conclusion of the study is that the former division of Poland between Russian, German and Austrian Empires has persisting effects on the present-day development of each respective territory (formerly Russian-ruled, formerly Austrian-ruled and formerly Prussian-ruled) regardless of the level of continuity of human capital in each area (the formerly Prussian-ruled zone consists of two distinct areas, one continuously inhabited by Western Poles and one which experienced a population turnover after WW2 when it was settled primarily by Eastern Poles expelled by Stalin from Former Eastern Poland to new Polish areas in the west):



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    Another interesting study that focuses on descendants of Eastern Polish expellees from lands annexed by the Soviet Union in 1945, is Becker et al. 2018, "Forced Migration and Human Capital: Evidence from Post-WW2 Population Transfers" (2018). This study found out that descendants of Poles uprooted from Former Eastern Poland (Kresy Wschodnie in Polish) tend to outperform other Poles in terms of educational attainment. Quote:

    "(...) Poles with a family history of forced migration are significantly more educated today [than other Poles]. Descendants of forced migrants have on average one extra year of schooling, driven by a higher propensity to finish secondary or higher education. This result holds when we restrict ancestral locations to a subsample around the Kresy border and include fixed effects for the destination of migrants. Since Kresy migrants were of the same ethnicity and religion as other Poles, we bypass confounding factors of other cases of forced migration. We show that labor market competition with natives and selection of migrants are also unlikely to drive our results. Survey evidence suggests that forced migration led to a shift in preferences, away from material possessions and towards investment in a mobile asset – human capital. The effects persist over three generations. (...)"
    Last edited by Tomenable; 12-07-2018 at 06:38 PM.

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