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The Great Divide Revisited: Ottoman and Habsburg Legacies on Transition


  • Valentina Dimitrova-Grajzl


The former socialist countries of South East and Central Europe exhibit great variation in institutional quality. Unlike the sparse existing literature, I claim that the variation can be explained by the legacies of the Ottoman and Habsburg Empires. I identify historical legacies of the Empires, which have affected the current institutional quality of the successor states. I show empirically that the Empires' legacies are key determinants of institutional quality, and that the Habsburg successors have institutions that are more efficient in a market economy than the Ottoman successors. In contrast, I find an insignificant effect of socialism on institutional quality. Copyright 2007 Blackwell Publishing Ltd..

Suggested Citation

  • Valentina Dimitrova-Grajzl, 2007. "The Great Divide Revisited: Ottoman and Habsburg Legacies on Transition," Kyklos, Wiley Blackwell, vol. 60(4), pages 539-558, November.
  • Handle: RePEc:bla:kyklos:v:60:y:2007:i:4:p:539-558

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    References listed on IDEAS

    1. Palairet,Michael R., 1997. "The Balkan Economies c.1800–1914," Cambridge Books, Cambridge University Press, number 9780521580519, March.
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    Cited by:

    1. BenYishay, Ariel & Grosjean, Pauline, 2014. "Initial endowments and economic reform in 27 post-socialist countries," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 892-906.
    2. Amat Adarov & Mario Holzner & Luka Sikic, 2016. "Backwardness, Industrialisation and Economic Development in Europe," wiiw Balkan Observatory Working Papers 123, The Vienna Institute for International Economic Studies, wiiw.
    3. Grosjean, Pauline, 2011. "The institutional legacy of the Ottoman Empire: Islamic rule and financial development in South Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 39(1), pages 1-16, March.
    4. Martin Mendelski & Alexander Libman, 2014. "Demand for litigation in the absence of traditions of rule of law: an example of Ottoman and Habsburg legacies in Romania," Constitutional Political Economy, Springer, vol. 25(2), pages 177-206, June.
    5. Elira Karaja & Jared Rubin, 2017. "The Cultural Transmission of Trust Norms: Evidence from a Lab in the Field on a Natural Experiment," Working Papers 17-08, Chapman University, Economic Science Institute.
    6. repec:eee:jcecon:v:45:y:2017:i:3:p:456-480 is not listed on IDEAS
    7. Ilaria Petrarca & Roberto Ricciuti, 2014. "Synthetic ‘Real Socialism’: A Counterfactual Analysis of Political and Economic Liberalizations," Working Papers 11/2014, University of Verona, Department of Economics.
    8. Jan Fidrmuc, 2012. "How Persistent is Social Capital?," CEDI Discussion Paper Series 12-04, Centre for Economic Development and Institutions(CEDI), Brunel University.
    9. Török, Ádám, 2009. "Társadalomtudományi tények és természettudományos módszerek
      [Social scientific facts and natural scientific techniques]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1067-1087.

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