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The Persistence of de Facto Power: Elites and Economic Development in the US South, 1840-1960

  • Philipp Ager

    ()

    (Universitat Pompeu Fabra)

Wealthy elites may end up retarding economic development for their own interests. This paper examines how the historical planter elite of the Southern US affected economic development at the county level between 1840 and 1960. To capture the planter elite’s potential to exercise de facto power, I construct a new dataset on the personal wealth of the richest Southern planters before the American Civil War. I find that counties with a relatively wealthier planter elite before the Civil War performed significantly worse in the post-war decades and even after World War II. I argue that this is the likely consequence of the planter elite’s lack of support for mass schooling. My results suggest that when during Reconstruction the US government abolished slavery and enfranchised the freedmen, the planter elite used their de facto power to maintain their influence over the political system and preserve a plantation economy based on low-skilled labor. In fact, I find that the planter elite was better able to sustain land prices and the production of plantation crops during Reconstruction in counties where they had more de facto power.

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File URL: http://ehes.org/EHES_No38.pdf
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Paper provided by European Historical Economics Society (EHES) in its series Working Papers with number 0038.

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Length: 55 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:hes:wpaper:0038
Contact details of provider: Web page: http://www.ehes.org

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  1. Irwin James R., 1994. "Explaining the Decline in Southern per Capita Output after Emancipation," Explorations in Economic History, Elsevier, vol. 31(3), pages 336-356, July.
  2. Richard Hornbeck & Suresh Naidu, 2012. "When the Levee Breaks: Black Migration and Economic Development in the American South," NBER Working Papers 18296, National Bureau of Economic Research, Inc.
  3. Aghion, Philippe & Caroli, Eve & García-Peñalosa, Cecilia, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Scholarly Articles 12502063, Harvard University Department of Economics.
  4. Bertocchi, Graziella & Dimico, Arcangelo, 2014. "Slavery, education, and inequality," European Economic Review, Elsevier, vol. 70(C), pages 197-209.
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  7. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc.
  8. Daniel Aaronson & Bhashkar Mazumder, 2011. "The Impact of Rosenwald Schools on Black Achievement," Journal of Political Economy, University of Chicago Press, vol. 119(5), pages 821 - 888.
  9. Gabrielle Fack & Julien Grenet, 2010. "When do Better Schools Raise Housing Prices? Evidence from Paris Public and Private Schools," CEE Discussion Papers 0119, Centre for the Economics of Education, LSE.
  10. Raghuram G. Rajan & Rodney Ramcharan, 2011. "Land and Credit: A Study of the Political Economy of Banking in the United States in the Early 20th Century," Journal of Finance, American Finance Association, vol. 66(6), pages 1895-1931, December.
  11. Alston, Lee J. & Ferrie, Joseph P., 1985. "Labor Costs, Paternalism, and Loyalty in Southern Agriculture: A Constraint on the Growth of the Welfare State," The Journal of Economic History, Cambridge University Press, vol. 45(01), pages 95-117, March.
  12. Arindrajit Dube & T. William Lester & Michael Reich, 2010. "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 945-964, November.
  13. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
  14. Lange, Fabian & Olmstead, Alan L. & Rhode, Paul W., 2009. "The Impact of the Boll Weevil, 1892–1932," The Journal of Economic History, Cambridge University Press, vol. 69(03), pages 685-718, September.
  15. Rodney Ramcharan, 2010. "Inequality and Redistribution: Evidence from U.S. Counties and States, 1890-1930," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 729-744, November.
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