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The legacy of the Great Wall

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  • Bai, Yu
  • Arabadzhyan, Anastasia
  • Li, Yanjun

Abstract

This paper examines the long-term effects of historical institutions on modern economic development. The Ming Great Wall, built to prevent incursions from northern barbarian nomads, divided China, which encouraged institutionalized self-governance, from the patron-client model of the nomads who lacked a system of local government or a fiscal and legal system. By exploring this cutoff and using a geographical regression discontinuity design (GRDD) framework, we document that present-day economic development, as measured by nighttime light intensity, exhibits a discontinuity at the Great Wall. After considering other potential explanatory factors, we suggest that the differences in the administration established during the Ming dynasty might explain this discontinuity. The immediate impacts on the economic outcomes during the succeeding dynasty and the persistent differences in institutional development proxies, which serve as deep determinants of economic development, represent supplements to our findings.

Suggested Citation

  • Bai, Yu & Arabadzhyan, Anastasia & Li, Yanjun, 2022. "The legacy of the Great Wall," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 120-147.
    • Handle: RePEc:eee:jeborg:v:196:y:2022:i:c:p:120-147
    DOI: 10.1016/j.jebo.2022.01.010
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    2. Gao, Ming & Gu, Qiankun & He, Shijun & Kong, Dongmin, 2023. "Legal environment and corporate tax avoidance: A geographic discontinuity design based on the Great Wall in China," Finance Research Letters, Elsevier, vol. 53(C).

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    More about this item

    Keywords

    The geographic regression discontinuity; Economic development; Institutional development; Long-term persistence; China;
    All these keywords.

    JEL classification:

    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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