Growth, Colonization, and Institutional Development: In and Out of Africa

This essay investigates the determinants of the growth performance of Africa. I start by illustrating a broader research agenda which accounts not only for basic economic and demographic factors, but also for the role of history and institutional development. After reporting results from standard growth regressions, I analyze the role of Africa’s peculiar history, which has been marked by its colonization experience. Next I discuss the potential growth impact of state fragility, a concept which reflects multiple facets of the dysfunctions that plague the continent. The last topic I address is the influence, in and out of Africa, of the slave trades. The essay ends with critical conclusions and suggestions for further research.growth, Africa, history, colonization, institutions, state fragility, slavery

The vanishing bequest tax. The Comparative Evolution of Bequest Taxation in Historical Perspective

Bequest tax revenues have been constantly declining in all OECD countries for at least seventy years. We propose an explanation which is based on a dynamic politico-economic model where the evolution of bequest taxation is determined by wealth inequality. Since economic development induces a growing role of labor income and thus a reduction of wealth inequality, bequest taxation is reduced over time. Our model also explains cross-country differences in the level and speed of adjustment of the tax, by embedding structural reallocation from agriculture to manufacturing and a consequent shift of the tax base from easy-to-tax land to hard-to-tax capital. This implies a lower tax level, and a slower equalization-induced tax reduction, the higher is the tax avoidance rate and the less developed is the economy. Finally, the introduction of franchise restrictions which are gradually lifted over time allows the model to reproduce the humped-shaped long-term evolution of bequest taxation starting from the nineteenth century for those countries that are now modern industrial democracies, and also helps to explain the discrepancies currently observed between tax systems in developed and underdeveloped countries.Bequest Tax, Inequality, Structural Reallocation, Redistribution, Voting

Growth, Colonization, and Institutional Development. In and Out of Africa

This essay investigates the determinants of the growth performance of Africa. I start by illustrating a broader research agenda which accounts not only for basic economic and demographic factors, but also for the role of history and institutional development. After reporting results from standard growth regressions, I analyze the role of Africa’s peculiar history, which has been marked by its colonization experience. Next I discuss the potential growth impact of state fragility, a concept which reflects multiple facets of the dysfunctions that plague the continent. The last topic I address is the influence, in and out of Africa, of the slave trades. The essay ends with critical conclusions and suggestions for further research.Growth; Africa; history; colonization; institutions; state fragility; slavery

The Enfranchisement of Women and the Welfare State

We offer a rationale for the decision to extend the franchise to women within a politico-economic model where men are richer than women, women display a higher preference for public goods, and women’s disenfranchisement carries a societal cost. We first derive the tax rate chosen by the male median voter when women are disenfranchised. Next we show that, as industrialization raises the reward to mental labor relative to physical labor, women’s relative wage increases. When the cost of disenfranchisement becomes higher than the cost of the higher tax rate which applies under universal enfranchisement, the male median voter is better off extending the franchise to women. A consequent expansion of the size of government is only to be expected in societies with a relatively high cost of disenfranchisement. We empirically test the implications of the model over the 1870-1930 period. We proxy the gender wage gap with the level of per capita income and the cost of disenfranchisement with the presence of Catholicism, which is associated with a more traditional view of women’s role and thus a lower cost. The gender gap in the preferences for public goods is proxied by the availability of divorce, which implies marital instability and a more vulnerable economic position for women. Consistently with the model’s predictions, women suffrage is affected positively by per capita income and negatively by the presence of Catholicism and the availability of divorce, while women suffrage increases the size of government only in non-Catholic countries.Women Suffrage, Inequality, Public Goods, Welfare State, Culture, Family, Divorce

The Enfranchisement of Women and the Welfare State

We offer a rationale for the decision to extend the franchise to women within a politico-economic model where men are richer than women, women display a higher preference for public goods, and women’s disenfranchisement carries a societal cost. We first derive the tax rate chosen by the male median voter when women are disenfranchised. Next we show that, as industrialization raises the reward to mental labor relative to physical labor, women’s relative wage increases. When the cost of disenfranchisement becomes higher than the cost of the higher tax rate which applies under universal enfranchisement, the male median voter is better off extending the franchise to women. A consequent expansion of the size of government is only to be expected in societies with a relatively high cost of disenfranchisement. We empirically test the implications of the model over the 1870-1930 period. We proxy the gender wage gap with the level of per capita income and the cost of disenfranchisement with the presence of Catholicism, which is associated with a more traditional view of women’s role and thus a lower cost. The gender gap in the preferences for public goods is proxied by the availability of divorce, which implies marital instability and a more vulnerable economic position for women. Consistently with the model’s predictions, women suffrage is affected positively by per capita income and negatively by the presence of Catholicism and the availability of divorce, while women suffrage increases the size of government only in non-Catholic countries.women suffrage, inequality, public goods, welfare state, culture, family, divorce

The Evolution of the Racial Gap in Education and the Legacy of Slavery

We study the evolution of racial educational inequality across US states from 1940 to 2000. We show that throughout this period, despite evidence of convergence, the racial gap in attainment between blacks and whites has been persistently determined by the initial gap. We obtain these results with 2SLS estimates where slavery is used as an instrument for the initial gap. The excludability of slavery is preliminarily established by instrumenting it with the share of disembarked slaves from the Trans-Atlantic Slave Trade. Using the same approach we also find that income growth is negatively affected by the initial racial gap in education and that slavery affects growth indirectly through this channelRace; inequality; education; slavery; development;

The Fragile Definition of State Fragility

We investigates the link between fragility and economic development in sub-Saharan Africa over a yearly panel including 28 countries for the 1999-2004 period. Beside the conventional definition of fragility adopted by the OECD Development Assistance Committee, we introduce the more severe definition of extreme fragility. We show that only the latter exerts a significantly negative impact on economic development, once standard economic, demographic, and institutional regressors are accounted for. As a by-product of this investigation we produce up-to-date evidence on the growth performance of the area. We find a tendency to convergence and no influence of geographic and historical factors.State fragility; growth; Africa; aid.

Growth, History, or Institutions? What Explains State Fragility in Sub-Saharan Africa

We explore the determinants of state fragility in sub-Saharan Africa. Controlling for a wide range of economic, demographic, geographic and istitutional regressors, we find that institutions, and in particular the civil liberties index and the number of revolutions, are the main determinants of fragility, even taking into account their potential endogeneity. Economic factors such as income growth and investment display a non robust impact after controlling for omitted variables and reverse causality. Colonial variables reflecting the history of the region display a marginal impact on fragility once institutions are accounted for.State fragility, Africa, institutions, colonial history.

Citizenship laws and international migration in historical perspective

We investigate the origin, impact and evolution of the legal institution of citizenship. We compile a dataset across countries of the world from the 19th century, which documents how citizenship laws have evolved from the common and civil law traditions. Contrary to the predictions of legal theory, we show that the original, exogenously-given citizenship laws did not matter for migration flows during the early, mass migrations period. After WWII, citizenship-granting institutions are no longer exogenous as they are shown to be determined by international migration flows, border stability, the establishment of democracy, the welfare burden, cultural factors, and colonial history. -- Wir untersuchen die Entstehung, die Bedeutung und die Entwicklung des Staatsbürgerschaftsrechtes. Es wird ein Datensatz von Ländern zur Zeit des 19. Jahrhunderts zusammengestellt, der dokumentiert, wie Staatsbürgerschaftsgesetze aus gewohnheits- und zivilrechtlichen Traditionen entstanden sind. Entgegen den Voraussagen der Rechtstheorie kommen wir zu dem Ergebnis, dass die ursprünglichen, exogen gegebenen Staatsbürgerschaftsgesetze keinen Einfluss auf die Migrationsströme der frühen Massenmigrationsperiode hatten. Seit dem zweiten Weltkrieg kann man die staatsbürgerschaftsrechtlichen Normen und Institutionen nicht mehr als gegeben betrachten. Vielmehr zeigt sich, dass sie durch internationale Migrationsbewegungen, die Stabilität von Grenzen, das Vorhandensein einer demokratischen Ordnung, die Belastung der Wohlfahrt, kulturelle Faktoren sowie die Kolonialgeschichte bestimmt werden.Citizenship laws,international migration,legal origins,democracy,borders

Slavery, Education, and Inequality

We investigate the impact of slavery on the current performances of the US economy. Over a cross section of counties, we find that the legacy of slavery does not affect current income per capita, but does affect current income inequality. In other words, those counties that displayed a higher proportion of slaves are currently not poorer, but more unequal. Moreover, we find that the impact of slavery on current income inequality is determined by racial inequality. We test three alternative channels of transmission between slavery and inequality: a land inequality theory, a racial discrimination theory and a human capital theory. We find support for the third theory, i. e., even after controlling for potential endogeneity, current inequality is primarily influenced by slavery through the unequal educational attainment of blacks and whites. To improve our understanding of the dynamics of racial inequality along the educational dimension, we complete our investigation by analyzing a panel dataset covering the 1940-2000 period at the state level. Consistently with our previous findings, we find that the educational racial gap significantly depends on the initial gap, which was indeed larger in the former slave states.slavery, development, inequality, institutions, education