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European influence and economic development

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  • Theo S. Eicher
  • David J. Kuenzel

Abstract

The development accounting literature identifies political institutions as fundamental development determinants. Forms of government or executive constraints are thought to shape economic institutions (e.g., property rights) that provide necessary incentives for economic growth. One strand of the literature suggests that European influence is a crucial economic development determinant, presumably through the adoption of European institutions. But how exactly did European influence in the distant past induce positive economic outcomes today? Previous approaches rely on “language,” “settler mortality,” “legal origins” or the “number of European settlers” as indirect proxies of European influence. We propose a direct and quantifiable mechanism: the adoption of European constitutional features. We construct a dataset of all constitutional dimensions from 1800–2008 for all countries and find that nations experience growth accelerations after adopting features of European constitutions. The growth effects are influenced (negatively) by periods of political turmoil, but they are independent of colonial backgrounds. These results show how European influence may have fostered growth, and they imply that countries were able to overcome adverse initial conditions over the last 200 years by adopting European constitutional features. Our constitutional dataset is sufficiently detailed to identify the specific dimensions of European constitutions that matter most for development: legislative rules and specific provisions that curtail executive powers. Influence européenne et développement économique. La littérature relative au développement définit les institutions politiques comme facteurs majeurs de ce dernier. Les formes de gouvernement ainsi que les contraintes exercées sur l’exécutif sont supposées façonner les institutions économiques (par exemple la propriété intellectuelle), lesquelles fournissant les stimulations nécessaires à la croissance économique. L’une des branches de cette littérature suggère que l’influence européenne représente un facteur de développement économique essentiel, vraisemblablement grâce à l’adoption d’institutions émanant du vieux continent. Mais en quoi exactement l’influence européenne a‐t‐elle, dans un passé lointain, engendré des résultats économiques positifs aujourd’hui ? Les approches précédentes s’appuient sur la langue , la mortalité des colons , les origines juridiques ou le nombre de colons européens comme autant d’indicateurs relatifs à l’influence européenne. Nous proposons un mécanisme direct et quantifiable : l’adoption de structures constitutionnelles européennes. Nous avons établi un ensemble de données pour tous les aspects constitutionnels des pays européens de 1800 à 2008, et avons constaté que les nations profitaient d’une accélération de leur croissance après l’adoption de certaines de ces caractéristiques. Les effets de cette croissance sont minorés par les périodes de troubles politiques, mais restent indépendants de l’histoire coloniale. Ces résultats montrent comment l’influence européenne a stimulé la croissance, et laissent entendre qu’au cours des deux derniers siècles, les pays ont surmonté certaines conditions défavorables initiales en adoptant certaines caractéristiques constitutionnelles européennes. Notre ensemble de données est suffisamment détaillé pour permettre d’identifier les aspects constitutionnels européens les plus importants relativement au développement : les règlements législatifs et les dispositions particulières limitant les pouvoirs exécutifs.

Suggested Citation

  • Theo S. Eicher & David J. Kuenzel, 2019. "European influence and economic development," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(2), pages 667-734, May.
  • Handle: RePEc:wly:canjec:v:52:y:2019:i:2:p:667-734
    DOI: 10.1111/caje.12385
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    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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