The economic and demographic transition, mortality, and comparative development

We propose a unified growth theory to investigate the mechanics generating the economic and demographic transition, and the role of mortality differences for comparative development. The framework can replicate the quantitative patterns in historical time series data and in contemporaneous cross-country panel data, including the bi-modal distribution of the endogenous variables across countries. The results suggest that differences in extrinsic mortality might explain a substantial part of the observed differences in the timing of the take-off across countries and the worldwide density distribution of the main variables of interest

Health, Development, and the Demographic Transition

This paper provides a unified theory of the economic and demographic transition. The main mechanism is based on optimal decisions about fertility and time investments in heterogeneous types of human capital. These decisions depend on different dimensions of health, which themselves are endogenously determined in the process of development. By disentangling the distinct roles that different dimensions of health, such as adult longevity, child mortality, and overall healthiness, play for education and fertility decisions, the model is able to generate dynamics that can replicate the historical development pattern in the Western world. The model generates an endogenous economic transition from a situation of sluggish growth in incomes and productivity to a modern growth regime. Closely related, a demographic transition from high mortality and high fertility to low mortality and low fertility arises, with an intermediate phase of increasing fertility despite falling mortality rates. The model can generate a positive correlation between income and fertility during early stages of development, as well as a decline net fertility in the last phase of the demographic transition, and it provides a rationale for fertility declines that precede drops in child mortalityendogenous life expectancy, child mortality, health, heterogeneous human capital, technological change

Life Expectancy and Economic Growth: The Role of the Demographic Transition

In this paper we investigate the causal effect of life expectancy on economic growth by explicitly accounting for the role of the demographic transition. In addition to focusing on issues of empirical identification, this paper emphasizes the role of the econometric specification. We present a simple theory of the economic and demographic transition where individuals' education and fertility decisions depend on their life expectancy. The theory predicts that before the demographic transition improvements in life expectancy primarily increase population. Improvements in life expectancy do, however, reduce population growth and foster human capital accumulation after the onset of the demographic transition. This implies that the effect of life expectancy on population, human capital and income per capita is not the same before and after the demographic transition. Moreover, a sufficiently high life expectancy is ultimately the trigger of the transition to sustained income growth. We provide evidence supporting these predictions using data on exogenous mortality reductions in the context of the epidemiological revolution.life expectancy, demographic transition, epidemiological revolution, heterogeneous treatment effects

”Thou shalt not covet ...”: Prohibitions, Temptation and Moral Values

We propose a theory studying temptation in presence of both externally and internally sanctioned prohibitions. Moral values that (internally) sanction prohibited actions and their desire may increase utility by reducing self-control costs, thereby serving as partial commitment devices. We apply the model to crime and study the conditions under which agents would optimally adhere to moral values of honesty. Incentives to be moral are non- monotonic in the crime premium. Larger external punishments increase temptation and demand for morality, so that external and internal sanctions are complements. The model helps rationalizing stylized facts that proved difficult to explain with available theories.Prohibitions, Temptation, Self-Control, Moral Values, Crime

Democratization, Violent Social Conflicts, and Growth

This paper investigates the empirical role of violent conflicts for the causal effect of democracy on economic growth. Exploiting within-country variation to identify the effect of democratization during the "Third Wave", we find evidence that the effect of democratization is weaker than reported previously once one accounts for the incidence of conflict, while the incidence of conflict itself significantly reduces growth. The results show in turn that permanent democratic transitions significantly reduce the incidence and onset of conflict, which suggests that part of the positive growth effect of democratization arises because democratization reduces conflict incidence. When accounting for the role of violence during democratization, we find evidence that peaceful transitions to democracy have a significant positive effect on growth that is even larger than reported in the previous literature, while violent transitions to democracy have no, or even negative, effects on economic growth.Democratization, Armed Conict, Civil War, Economic Growth, Democratization Scenario, Peaceful Transition.

Human Capital Accumulation, Lifetime Duration and the Process of Economic Development

This paper presents a microfounded theory of long-term development. We model the interplay between economic variables, namely the process of human capital formation and technological progress, and the biological constraint of finite lifetime expectancy. All these processes affect each other and are endogenously determined. The model is analytically solved and simulated for illustrative purposes. The resulting dynamics reproduce a long period of stagnant growth as well as an endogenous and rapid transition to a situation characterized by permanent growth. This transition can be interpreted as industrial revolution. Historical and empirical evidence is discussed and shown to be in line with the predictions of the model.long-term development, endogenous lifetime duration, endogenous life expectancy, human capital, technological progress, growth externalities

Democratization, Violent Social Conflicts, and Growth

This paper investigates the empirical role of violent conflicts for the causal effect of democracy on economic growth. Exploiting within-country variation to identify the effect of democratization during the “Third Wave”, we find evidence that the effect of democratization is weaker than reported previously once one accounts for the incidence of conflict, while the incidence of conflict itself significantly reduces growth. The results show in turn that permanent democratic transitions significantly reduce the incidence and onset of conflict, which suggests that part of the positive growth effect of democratization arises because democratization reduces conflict incidence. When accounting for the role of violence during democratization, we find evidence that peaceful transitions to democracy have a significant positive effect on growth that is even larger than reported in the previous literature, while violent transitions to democracy have no, or even negative, effects on economic growth.democratization, armed conflict, civil war, economic growth, democratization scenario, peaceful transition

Disease Environment and Civil Conflicts

This paper tests the hypothesis that a high and persistent exposure to infectious diseases increases the likelihood of civil conflicts. Diseases that are difficult to prevent and treat may reduce the opportunity costs of violent activities, both directly and indirectly. The analysis exploits new data on the number of multi-host vector-transmitted infectious diseases that are endemic in each country. As consequence of their specific features, the presence of these pathogens in a country is closely related to geo-climatological conditions and exogenous to civil conflict. The findings document that a larger disease richness is a statistically robust and quantitatively relevant determinant of civil conflicts for the period 1960-2004. Exploiting within country variation, the findings also document that interactions between climatological shocks in terms of droughts and the disease environment have a significant effect on the risk of civil wars. The results are robust to different specifications, data sets and estimation methods, and suggest that the persistent exposure to a more unfavorable environment in terms of disease richness is an important determinant of the incidence of civil conflict. The results also suggest the potential relevance of a channel linking geography to economic development that has not been investigated in the literature.disease environment, civil conflict, multi-host vector-transmitted pathogens, civil war

Democratization and Civil Liberties: The Role of Violence During the Transition

This paper investigates the role of violent civil conflicts during the process of democratization for the quality of emerging democracies, and in particular, the protection of civil (political and economic) liberties. A simple theory in which different groups may engage in violent conflict in order to become the ruler predicts a crucial role of the democratization scenario. A peaceful democratization leads to democracies with a high degree of civil liberties, reflecting a social contract according to which all groups are politically represented and the rulers deliberately abstain from wasteful rent extraction. A transition to democracy under a violent conflict is less likely to lead to a system with a high degree of civil liberties. Empirical evidence from the third wave of democratization based on a difference-indifference methodology supports the theoretical predictions. The findings suggest that violent conflicts during the democratic transition have persistent negative effects on the quality of the emerging democracies.

Democratization and Civil Liberties: The Role of Violence During the Transition

This paper investigates the role of violent civil conflicts during the process of democratization for the quality of emerging democracies, and in particular, the protection of civil (political and economic) liberties. A simple theory in which different groups may engage in violent conflict in order to become the ruler predicts a crucial role of the democratization scenario. A peaceful democratization leads to democracies with a high degree of civil liberties, reflecting a social contract according to which all groups are politically represented and the rulers deliberately abstain from wasteful rent extraction. A transition to democracy under a violent conflict is less likely to lead to a system with a high degree of civil liberties. Empirical evidence from the third wave of democratization based on a difference-in-difference methodology supports the theoretical predictions. The findings suggest that violent conflicts during the democratic transition have persistent negative effects on the quality of the emerging democracies.democratization, civil conflict, violent democratization, civil liberties