Getting Modernity
Augmenting the availability of historical GDP per capita estimates through machine learning
Philipp Koch, Viktor Stojkoski & César Hidalgo
Proceedings of the National Academy of Sciences, 24 September 2024
Abstract:
Can we use data on the biographies of historical figures to estimate the GDP per capita of countries and regions? Here, we introduce a machine learning method to estimate the GDP per capita of dozens of countries and hundreds of regions in Europe and North America for the past seven centuries starting from data on the places of birth, death, and occupations of hundreds of thousands of historical figures. We build an elastic net regression model to perform feature selection and generate out-of-sample estimates that explain 90% of the variance in known historical income levels. We use this model to generate GDP per capita estimates for countries, regions, and time periods for which these data are not available and externally validate our estimates by comparing them with four proxies of economic output: urbanization rates in the past 500 y, body height in the 18th century, well-being in 1850, and church building activity in the 14th and 15th century. Additionally, we show our estimates reproduce the well-known reversal of fortune between southwestern and northwestern Europe between 1300 and 1800 and find this is largely driven by countries and regions engaged in Atlantic trade. These findings validate the use of fine-grained biographical data as a method to augment historical GDP per capita estimates. We publish our estimates with CI together with all collected source data in a comprehensive dataset.
Innovation Networks in the Industrial Revolution
Lukas Rosenberger, Walker Hanlon & Carl Hallmann
NBER Working Paper, August 2024
Abstract:
How did Britain sustain faster rates of economic growth than comparable European countries, such as France, during the Industrial Revolution? We argue that Britain possessed an important but underappreciated innovation advantage: British inventors worked in technologies that were more central within the innovation network. We offer a new approach for measuring the innovation network using patent data from Britain and France in the late-18th and early-19th century. We show that the network influenced innovation outcomes and demonstrate that British inventors worked in more central technologies within the innovation network than French inventors. Drawing on recently developed theoretical tools, and using a novel estimation strategy, we quantify the implications for technology growth rates in Britain compared to France. Our results indicate that the shape of the innovation network, and the location of British inventors within it, explains an important share of the more rapid technological change and industrial growth in Britain during the Industrial Revolution.
To block or not: Why the British ruling elite enabled the Industrial Revolution during the 18th century
Emrah Gulsunar
European Review of Economic History, August 2024, Pages 335-359
Abstract:
This study explores why the ruling elite in 18th-century Britain not only allowed but actively supported industrialization. Economic rents, political power, and international competition are commonly cited as the reasons, but these explanations lack empirical evidence. By conducting a text analysis of parliamentary legislation and debates on the cotton industry, this study demonstrates that the ruling elite was primarily motivated by keeping unemployment low and sustaining the British economy’s international competitiveness. A favorable political system facilitated the realization of the elite’s objectives.
Technology Adoption, Mortality, and Population Dynamics
John Hejkal, B. Ravikumar & G. Vandenbroucke
Economic Journal, forthcoming
Abstract:
We develop a quantitative theory of mortality and population dynamics, emphasizing individuals’ decisions to reduce their mortality by adopting better health technology. Expanded use of this technology reduces the cost of adoption and confers a dynamic externality by increasing the future number of individuals who use the technology. Our model generates a diffusion curve whose shape dictates the pace of mortality reduction. The model explains historical trends in mortality rates and life expectancies at various ages and population dynamics in Western Europe. Unlike Malthusian theories based solely on income, ours is consistent with the observed disconnect between mortality and income. Unlike Beckerian theories of fertility, ours accounts for the observed acceleration in population.
The role of historic amenities in shaping cities
Miquel-Àngel Garcia-López & Elisabet Viladecans-Marsal
Regional Science and Urban Economics, November 2024
Abstract:
The existence of amenities matters to understanding people’s residential choices. Our theoretical model extends the standard urban model by introducing exogenous amenities to explain population allocation within cities. To estimate the model predictions, we focus on historic amenities using detailed geolocated data for 579 European cities. We analyze how the shape of city centers endowed or not endowed with these amenities is affected. We measure historic amenities with the location of buildings from the Roman, Medieval, and Renaissance-Baroque periods. Our results show that cities with historic buildings in their centers have steeper population density gradients, are more compact and centralized, and have been less affected by the suburbanization processes caused by transportation improvements. Heterogeneity analyses show that the quantity and the quality of historic buildings also matter. Several robustness checks controlling for natural and modern amenities and testing for the spatial scope of these amenities verify our main results.
Colonial Legacy and Informal Finance
Jiafu An, Chen Lin & Mingzhu Tai
Management Science, forthcoming
Abstract:
An influential line of research emphasizes that colonial legacy plays a key role in formal financial development. Can colonial legacy also shape informal finance? We investigate the impact of colonial legacy on informal financial development using a manually georeferenced data set within a credible empirical framework. In the 19th century, Europeans arbitrarily designed colonial borders that partitioned many ethnicities across multiple countries in Africa. Leveraging several spatial regression discontinuity designs across national borders and within British-French–partitioned Cameroon and a unique natural experiment where the same former British colony is compared with two otherwise similar areas with different exposures to French colonization, we discover that former British colonies today have better informal financial development than former French colonies. Exploring the channels, we find that places with a British colonial legacy maintain a style of social control that facilitates information flow, supports private enforcement and market interactions, and promotes strong legal cultures.
Fiscal legibility and state development: Theory and evidence from colonial Mexico
Francisco Garfias & Emily Sellars
American Journal of Political Science, forthcoming
Abstract:
We examine how fiscal legibility, the ability of central authorities to observe local conditions for the purposes of taxation, shapes political centralization and state development. When rulers lack information about the periphery, they may benefit from ceding autonomy to tax-collecting intermediaries to encourage fiscal performance. As information quality improves, rulers become better able to monitor and sanction local officials, allowing them to tighten control over taxation and establish more direct state presence. Centralization, in turn, encourages investment in improving fiscal legibility, leading to long-term divergence in state development. We study the consequences of a technological innovation that dramatically improved the Spanish Crown's fiscal legibility in colonial Mexico: the discovery of the patio process to refine silver. We show that political centralization differentially accelerated in affected districts and that these areas subsequently saw disproportionate state investment in informational capacity, altering the trajectory of state development.
Stationary steam power in the United Kingdom, 1800–70: An empirical reassessment
Sean Bottomley
Economic History Review, forthcoming
Abstract:
The conventional view that the industrial revolution was premised on the unprecedented supply of mechanical power delivered via steam engines has been undermined by econometric work, purporting to show that their adoption outside the cotton and mining sectors was extremely limited until at least 1870. This was largely because water and wind power remained viable and cost-competitive substitutes long into the nineteenth century. Using evidence from a newly compiled ‘census’ of stationary power installations in Suffolk, this paper demonstrates instead that the adoption of steam power was far greater than previously thought, especially in manufacturing. Moreover, the assumption that steam could be invariably substituted with environmental forces is untenable. Depending on circumstances, even very modest power requirements could only be met with steam. Although the quantitative picture remains incomplete, steam power was likely an indispensable sustentative factor for industrialization.
Political governance and urban systems: A persistent shock on population distribution from capital relocation in ancient China
Ming Lu, Haijun Ou & Yuejun Zhong
Regional Science and Urban Economics, September 2024
Abstract:
This paper exploits a quasi-natural experiment with the exogenous shock of capital relocation in ancient China from Nanjing to Beijing in 1421 CE during the Ming Dynasty, to investigate the relationship between political governance and urban systems. We constructed a unique historical panel dataset that measures population distributions among Chinese counties spanning over centuries. Using a difference-in-differences identification strategy, our results reveal that after the capital relocation, the effect of localities' distance to Beijing, the newly established capital at that time, on local population size turns to be significantly negative. Moreover, these effects still persisted in the next dynasty and modern China. Furthermore, the results indicate that the impact of the capital relocation on population distribution occur through two major channels of political governance: delivery and national security. The causal relationship between capital relocation and population distribution is demonstrated to be robust using a variety of identification strategies and robustness checks.