Institutions in development: the case of Poland
15th June 2016, 12:30pm, TW2 9.05, Floor 9, Tower 2, Clement’s Inn, London, WC2A 2AE
Speaker: Agnieszka Wysokinska, IGA Visiting Fellow.
There is growing evidence that history matters for economic development and that economic fortunes of societies were determined hundreds of years ago. The important question is what are the causes of persistence? There is growing evidence that institutions are the channel through which history operates. Which institutions and the exact mechanism through which they continue to affect development at present is less understood. Apart from institutions, culture has been hypothesised to play a role in economic development and given its slow moving nature would be another candidate for the channel. However, the evidence on the role of culture and the mechanism is scarce.
To shed more light on role of institutions and culture in the economic development, I exploit the 1815-1914 division of Poland between three neighbouring empires: Prussia, Russia and Austria. The division set the three parts on different paths to industrialisation and differentiated development, institutions and culture. These differences persisted until present. The former Prussian partition is still much more prosperous than the Russian and the Austrian even if we narrow the area to 10km from the historic border. The municipalities on the Prussian side of the border collect 20% more revenues from taxes than the ones on the Russian side. Much of the evidence collected suggest the instrumental role of agrarian reforms, which granted the property rights to peasants in the 19th century but in each of the partitions in a different way. However, culture was also affected during partitions and could play a role. To check if culture is indeed a factor, I exploit the exogenous variation from the post-World War Two forced migration movements from the Russian to the Prussian partition. The results of this exercise suggest that culture does not differentiate the economic fortunes.
Agnieszka Wysokinska is an Assistant Professor at University of Warsaw. She received her PhD from European University Institute. She is a Visiting Fellow at IGA LSE since March 2016.
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