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State History and Economic Development: Evidence from Six Millennia

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  • Borcan, Oana

    () (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Olsson, Ola

    () (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Putterman, Louis

    () (Brown University)

Abstract

All since the rise of the first civilizations, economic development has been closely intertwined with the evolution of states. In this paper, we contribute to the literature on state history and long-run economic development in four ways. First, we extend and complete the state history index from Bockstette, Chanda and Putterman (2002) by coding the experience with states from the first state origins, 3500 BCE, up until 2000 CE. Second, we explore empirically the relationship between time since transition to agriculture and state age, as well as subsequent state history. Our estimated unconditional correlation implies that a 1000 year earlier transition to agriculture is associated with a 470 years earlier emergence of state institutions. We show how this relationship differs between indigenously- and externally- originated states. Third, we show that the relationship between our extended state history index and current levels of economic development has the shape of an inverted u. The results reflect the fact that countries that were home to the oldest states, such as Iraq, Egypt and China, are poorer today than younger inheritors of their civilizations, such as Germany, Denmark and Japan. This pattern was already in place by 1500 CE and is robust to adjusting for migrations during the colonial era. Finally, we demonstrate a very close relationship between state formation and the adoption of writing.

Suggested Citation

  • Borcan, Oana & Olsson, Ola & Putterman, Louis, 2014. "State History and Economic Development: Evidence from Six Millennia," Working Papers in Economics 602, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0602
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    File URL: https://gupea.ub.gu.se/handle/2077/36598
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    References listed on IDEAS

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    1. Where do pro-social institutions come from?
      by pseudoerasmus in Pseudoerasmus on 2015-10-04 05:01:30

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    Cited by:

    1. Michalopoulos, Stelios & Putterman, Louis & Weil, David, 2016. "The Influence of Ancestral Lifeways on Individual Economic Outcomes in Sub-Saharan Africa," CEPR Discussion Papers 11366, C.E.P.R. Discussion Papers.
    2. repec:eee:exehis:v:64:y:2017:i:c:p:1-20 is not listed on IDEAS
    3. Thilo R. Huning & Fabian Wahl, 2016. "You Reap What You Know: Observability of Soil Quality, and Political Fragmentation," Working Papers 0101, European Historical Economics Society (EHES).
    4. Dombi, Akos & Grigoriadis, Theocharis, 2017. "Ancestry, Diversity & Finance: Evidence from Transition Economies," Discussion Papers 2017/4, Free University Berlin, School of Business & Economics.
    5. Vitola, Alise & Grigoriadis, Theocharis, 2018. "Diversity & empire: Baltic Germans & comparative development," Discussion Papers 2018/6, Free University Berlin, School of Business & Economics.
    6. Jonathan F. Schulz, 2016. "The Churches’ Bans on Consanguineous Marriages, Kin-networks and Democracy," Discussion Papers 2016-16, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    7. Ertan, Arhan & Fiszbein, Martin & Putterman, Louis, 2016. "Who was colonized and when? A cross-country analysis of determinants," European Economic Review, Elsevier, vol. 83(C), pages 165-184.
    8. Remi Jedwab & Adam Storeygard, "undated". "Economic and Political Factors in Infrastructure Investment: Evidence from Railroads and Roads in Africa 1960–2015," Working Papers 2017-3, The George Washington University, Institute for International Economic Policy.

    More about this item

    Keywords

    state history; comparative development;

    JEL classification:

    • N00 - Economic History - - General - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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