The economic effects of the Protestant Reformation: Testing the Weber hypothesis in the German Lands

Many theories, most famously Max Weber’s essay on the “Protestant ethic,” have hypothesized that Protestantism should have favored economic development. With their considerable religious heterogeneity and stability of denominational affiliations until the 19th century, the German Lands of the Holy Roman Empire present an ideal testing ground for this hypothesis. Using population figures in a dataset comprising 272 cities in the years 1300–1900, I find no effects of Protestantism on economic growth. The finding is robust to the inclusion of a variety of controls, and does not appear to depend on data selection or small sample size. In addition, Protestantism has no effect when interacted with other likely determinants of economic development. I also analyze the endogeneity of religious choice; instrumental variables estimates of the effects of Protestantism are similar to the OLS results.Protestantism, Culture, Economic Growth, Historical Development, Germany

Adopting a new religion: The case of Protestantism in 16th Century Germany

Using a rich dataset of territories and cities of the Holy Roman Empire in the 16th century, this paper investigates the determinants of adoption and diffusion of Protestantism as a state religion. A territory’s distance to Wittenberg, the city where Martin Luther taught, is a major determinant of adoption. This finding can be explained through a theory of strategic neighbourhood interactions: in an uncertain legal context, introducing the Reformation was a risky enterprise for territorial lords, and had higher prospects of success if powerful neighbouring states committed to the new faith first. The model is tested in a panel dataset featuring the dates of introduction of the Reformation.Protestantism, State religions, Germany, Spatial adoption of policies

A Tear in the Iron Curtain: The Impact of Western Television on Consumption Behavior

This paper examines the impact of exposure to foreign media on the economic behavior of agents in a totalitarian regime. We study private consumption choices focusing on former East Germany, where differential access to Western television was determined by geographic features. Using data collected after the transition to a market economy, we find no evidence of a significant impact of previous exposure to Western television on aggregate consumption levels. However, exposure to Western broadcasts affects the composition of consumption, biasing choices in favor of categories of goods with high intensity of pre-reunification advertisement. The effects vanish by 1998

Medieval Universities, Legal Institutions, and the Commercial Revolution

We present new data documenting medieval Europe’s Commercial Revolution” using information on the establishment of markets in Germany. We use these data to test whether medieval universities played a causal role in expanding economic activity, examining the foundation of Germany’s first universities after 1386 following the Papal Schism. We find that the trend rate of market establishment breaks upward in 1386 and that this break is greatest where the distance to a university shrank most. There is no differential pre-1386 trend associated with the reduction in distance to a university, and there is no break in trend in 1386 where university proximity did not change. These results are not affected by excluding cities close to universities or cities belonging to territories that included universities. Universities provided training in newly-rediscovered Roman and Canon law; students with legal training served in positions that reduced the uncertainty of trade in medieval Europe. We argue that training in the law, and the consequent development of legal and administrative institutions, was an important channel linking universities and greater economic activity

Educational Content, Educational Institutions and Economic Development: Lessons from History

Individuals’ choices of educational content are often shaped by the political economy of government policies that determine the incentives to acquire various skills. We first present a model to show how differences in educational content emerge as an equilibrium outcome of private decisions and government policy choices. We then illustrate these dynamics in two historical circumstances. In medieval Europe, states and the Church found individuals trained in Roman law valuable, and eventually supported investments in this new form of human capital. This had positive effects on Europe’s commercial and institutional development. In late 19th-century China, elites were afraid of the introduction of Western science and engineering and continued to select civil servants - who enjoyed substantial rents—based on their knowledge of Confucian classics. As a result, China lacked skills useful in modern industry. Finally, we present a variety of other contemporary and historical applications of this theory

Educational Content, Educational Institutions and Economic Development: Lessons from History

Individuals’ choices of educational content are often shaped by the political economy of government policies that determine the incentives to acquire various skills. We first present a model to show how differences in educational content emerge as an equilibrium outcome of private decisions and government policy choices. We then illustrate these dynamics in two historical circumstances. In medieval Europe, states and the Church found individuals trained in Roman law valuable, and eventually supported investments in this new form of human capital. This had positive effects on Europe’s commercial and institutional development. In late 19th-century China, elites were afraid of the introduction of Western science and engineering and continued to select civil servants - who enjoyed substantial rents—based on their knowledge of Confucian classics. As a result, China lacked skills useful in modern industry. Finally, we present a variety of other contemporary and historical applications of this theory.Educational Content; Educational Institutions; Political Economy; Development

The Economic Effects of the Protestant Reformation: Testing the Weber Hypothesis in the German Lands

Following Max Weber, many theories have hypothesized that Protestantism should have favored economic development. With its religious heterogeneity, the Holy Roman Empire presents an ideal testing ground for this hypothesis. Using population figures of 272 cities in the years 1300–1900, I find no effects of Protestantism on economic growth. The finding is precisely estimated, robust to the inclusion of various controls, and does not depend on data selection or small sample size. Protestantism has no effect when interacted with other likely determinants of economic development. Instrumental variables estimates, considering the potential endogeneity of religious choice, are similar to the OLS results

Reformation and Reallocation: Religious and Secular Economic Activity in Early Modern Germany

The Protestant Reformation, beginning in 1517, was a first-order economic shock. We document its effects on the sectoral allocation of economic activity in Germany using highly disaggregated data. During the Reformation, particularly in Protestant regions, large numbers of monasteries were expropriated. University graduates shifted toward secular, rather than religious, occupations. Forward-looking university students shifted away from the study of religious sector-specific theology, toward secular fields. Construction activity in the religious sector declined, particularly in Protestant regions, while secular construction increased. These findings highlight the unintended consequences of the Reformation—a religious movement that contributed to Europe’s secularization

Der lange Schatten der Geschichte: Mechanismen der Persistenz in der Wirtschaftsgeschichte

Aktuelle wirtschaftshistorische Forschung belegt, dass vergangene historische Begebenheiten einen großen Einfluss auf aktuelle wirtschaftliche und soziale Entwicklungen haben. Auf der Konferenz »The Long Shadow of History« kamen international renommierte Wissenschaftler am Center for Advanced Studies (CAS) der Ludwig-Maximilians-Universität in München zusammen, um über die historische Persistenz wirtschaftlicher Prozesse zu diskutieren. Mit dieser Konferenz wurde der Grundstein für den Aufbau eines Netzwerkes von Wissenschaftlern gelegt, die auf diesem Gebiet forschen. In diesem Beitrag werden ein Einblick in dieses neue Forschungsfeld gegeben und die Forschungsprojekte, die auf der Konferenz vorgestellt wurden, zusammengefasst

Persistence and Activation of Right-Wing Political Ideology

We investigate the persistence of right-wing ideology in Germany. The “Alternative for Germany” (AfD), founded as a party espousing fiscal conservatism, has turned to an openly nationalist and anti-immigrant platform since 2015. We document this rhetorical change with quantitative text analysis. We further show that municipalities that voted more for the AfD after 2015 also exhibited higher support for the Nazi party in the 1920s and 30s. The historical correlation we observe is positive, significant, and large. In our preferred specification, a one standard deviation increase in historical support for the Nazi party is associated with a 0.15 standard deviations larger change in votes towards the AfD. Our results are robust to controlling for a large set of historical and contemporary covariates, especially relating to unemployment and the recent inflow of refugees from the Middle East