Growth Stories
Connecting the Scientific and Industrial Revolutions: The Role of Practical Mathematics
Morgan Kelly & Cormac Ó Grád
Journal of Economic History, forthcoming
Abstract:
Disputes over whether the Scientific Revolution contributed to the Industrial Revolution begin with the common assumption that natural philosophers and artisans formed distinct groups. In reality, these groups merged together through a diverse group of applied mathematics teachers, textbook writers, and instrument makers catering to a market ranging from navigators and surveyors to bookkeepers. Besides its direct economic contribution in diffusing useful numerical skills, this “practical mathematics” facilitated later industrialization in two ways. First, a large supply of instrument and watch makers provided Britain with a pool of versatile, mechanically skilled labor to build the increasingly complicated machinery of the late eighteenth century. Second, the less well-known but equally revolutionary innovations in machine tools -- which, contrary to the Habbakuk thesis, occurred largely in Britain during the 1820s and 1830s to mass-produce interchangeable parts for iron textile machinery -- drew on a technology of exact measurement developed for navigational and astronomical instruments.
How does scientific progress affect cultural changes? A digital text analysis
Michela Giorcelli, Nicola Lacetera & Astrid Marinoni
Journal of Economic Growth, September 2022, Pages 415–452
Abstract:
We study the effects of scientific changes on broader cultural discourse, two phenomena that the economics literature identifies as key drivers of long-term growth, focusing on a unique episode in the history of science: the elaboration of the theory of evolution by Charles Darwin. We measure cultural discourse through the digitized text analysis of a corpus of hundreds of thousands of books as well as of Congressional and Parliamentary records for the US and the UK. We find that some concepts in Darwin’s theory, such as Evolution, Survival, Natural Selection and Competition, significantly increased their presence in the public discourse immediately after the publication of On the Origin of Species. Moreover, several words that embedded the key concepts of the theory of evolution experienced semantic and sentiment changes -- further channels through which Darwin’s theory influenced the broader discourse. Our findings represent the first large-sample, systematic quantitative evidence of the relation between two key determinants of long-term economic growth, and suggest that natural language processing offers promising tools to explore this relation.
Access to toilets and violence against women
Md Amzad Hossain, Kanika Mahajan & Sheetal Sekhri
Journal of Environmental Economics and Management, July 2022
Abstract:
This paper examines if in-home access to toilets reduces the risk of violent crimes against women. We use the roll out of the Swachh Bharat Mission, a flagship toilet construction program in India, to ascertain if assaults and rapes of women reduce when access to in-home toilets increases. We bolster our findings through an instrumental variable strategy using political alignment of locally elected representatives in close elections with the national government’s political party, post the launch of the program, as an instrument. We find that construction of toilets reduces sexual assaults on women, but do not discern consistent changes in rapes. Our findings for sexual assaults are robust to a variety of controls, specifications, and identification approaches. We address reporting changes as a plausible alternative explanation and present evidence to support the exclusion restriction in our IV strategy.
Unwanted daughters: The unintended consequences of a ban on sex-selective abortions on the educational attainment of women
Garima Rastogi & Anisha Sharma
Journal of Population Economics, October 2022, Pages 1473–1516
Abstract:
We study whether legal restrictions on prenatal discrimination against females leads to a shift by parents towards postnatal discrimination, focusing on the impact on educational attainment. We exploit the differentially timed introduction of a ban on sex-selective abortions across states in India. We find that a legal restriction on abortions led to an increase in the number of females born, as well as a widening in the gender gap in educational attainment. Females born in states affected by the ban are 2.3, 3.5, and 3.2 percentage points less likely to complete grade 10, complete grade 12, and enter university, respectively, relative to males. These effects are concentrated among non-wealthy households that lacked the resources to evade the ban. Investigating mechanisms, we find that the relative reduction in investments in female education was not driven by family size but because surviving females became relatively unwanted, whereas surviving males became relatively more valued, leading to an increasing concentration of household resources on them. Discrimination is amplified among higher-order births and among females with relatively few sisters. Finally, these negative effects exist despite the existence of a marriage market channel through which parents increase investments in their daughters’ education to increase the probability that they make a high-quality match. This suggests that policymakers need to address the unintended welfare consequences of interventions aimed at promoting gender equity.
The rural exodus and the rise of Europe
Thomas Baudin & Robert Stelter
Journal of Economic Growth, September 2022, Pages 365–414
Abstract:
We build a unified model of growth and internal migration and identify its deep parameters using an original set of Swedish data. Our structural estimation and counterfactual experiments suggest that conditions of migration between the countryside and cities have strongly shaped the timing and the intensity of the transition to growth. Mobility cost had to be low enough to enable population movement. Furthermore, initial productivity in rural industries had to be moderate to sustain the first phase of industrialization appearing in the countryside without delaying too much the second phase of industrialization taking place in cities. More than the initial productivity of rural industries or migration costs alone, what truly mattered for the transition to modern economic growth was the interplay between these two elements. By contrast, we evidence a poor role for mortality decline in the whole process. Finally, we discuss why our conclusions on Sweden are exemplary for the rest of Western Europe.
Sweet Diversity: Colonial Goods and the Welfare Gains from Global Trade after 1492
Jonathan Hersh & Hans-Joachim Voth
Explorations in Economic History, forthcoming
Abstract:
When did overseas trade start to matter for living standards? Traditional real-wage indices suggest that living standards in Europe stagnated before 1800. In this paper, we argue that welfare may have actually risen substantially, but surreptitiously, because of an influx of new goods. Colonial “luxuries” such as tea, coffee, and sugar became highly coveted. Together with more simple household staples such as potatoes and tomatoes, overseas goods transformed European diets after the discovery of America and the rounding of the Cape of Good Hope. They became household items in many countries by the end of the 18th century. We apply two standard methods to calculate broad orders of magnitude of the resulting welfare gains. While they cannot be assessed precisely, gains from greater variety may well have been big enough to boost European real incomes by 10% or more (depending on the assumptions used).
Fertility and Labor Market Responses to Reductions in Mortality
Sonia Bhalotra, Atheendar Venkataramani & Selma Walther
NBER Working Paper, August 2022
Abstract:
We investigate women’s fertility, labor and marriage market responses to a health innovation that led to reductions in mortality from treatable causes, and especially large declines in child mortality. We find delayed childbearing, with lower intensive and extensive margin fertility, a decline in the chances of ever having married, increased labor force participation and an improvement in occupational status. Our results provide the first evidence that improvements in child survival allow women to start fertility later and invest more in the labor market. We present a new theory of fertility that incorporates dynamic choices and reconciles our findings with existing models of behavior.
Colonial Roads and Regional Inequality
Brian Marein
Journal of Urban Economics, forthcoming
Abstract:
This paper examines the effect of road-building on local economic development and regional inequality by studying the effort in the early 20th century to connect all cities and towns in Puerto Rico with roads. Using newly digitized maps, I show that expanding the transport network failed to reduce regional disparities and that areas near old Spanish roads became relatively more prosperous during the export boom that followed annexation by the United States. Instrumental variable and spatial first differences strategies indicate that early access to roads promoted local economic development. Areas that already had access to roads before US-led road-building became more densely populated, specialized more in the production of export crops, and eventually led the transition away from agricultural employment. Those areas are still more prosperous, suggesting that early access to the transport network gave rise to path dependence in the location of economic activity. However, geographical factors and earlier economic development — also likely a product of geography — played a larger role in shaping the spatial pattern of development.
Democracy, growth, heterogeneity, and robustness
Markus Eberhardt
European Economic Review, August 2022
Abstract:
I motivate and empirically investigate differential long-run growth effects of democratisation across countries. While the existing literature recognises the potential for such heterogeneity, empirical implementations to date unanimously assume a common democracy-growth nexus across countries. Adopting novel methods for causal inference in policy evaluation I relax the homogeneity assumption. My results confirm that in the long-run democracy has a positive and significant average effect on per capita income, albeit at 10% this is at best half the magnitude of recent estimates in the literature. Guided by existing theories, additional analysis probes the patterns of the heterogeneous ‘democratic dividend’ across countries. Adopting two rule-based robustness exercises I furthermore demonstrate that, in contrast to recent contributions to the literature, my approach yields empirical findings that are robust to substantial changes to the sample.
A Puzzle with Missing Pieces: Explaining the Effectiveness of World Bank Development Projects
Louise Ashton et al.
World Bank Research Observer, forthcoming
Abstract:
The identification of key determinants of aid effectiveness is a long-standing question in the development community. This paper reviews the literature on aid effectiveness at the project level and then extends the inquiry in a variety of dimensions with new data on World Bank investment project financing. It confirms that the country institutional setting and quality of project supervision are associated with project success, as identified previously. However, many aspects of the development project cycle, especially project design, have been difficult to measure and therefore under-investigated. The paper finds that project design, as proxied by the estimated value added of design staff, the presence of prior analytic work, and other specially collected measures, is a significant predictor of ultimate project success. These factors generally grow in predictive importance as the income level of the country rises. The results also indicate that a key determinant of the staff's contribution is their experience with previous World Bank projects, but not other characteristics such as age, education, or country location. Key inputs to the project production process associated with subsequent performance are not captured in routine data systems, although it is feasible to do so. Further, the conceptualization and measurement of the success of project-based aid should be revisited by evaluative bodies to reflect a project's theorized contribution to development outcomes.
The Vagaries of the Sea: Evidence on the Real Effects of Money from Maritime Disasters in the Spanish Empire
Adam Brzezinski et al.
Review of Economics and Statistics, forthcoming
Abstract:
We estimate the effect of money supply changes on the real economy by exploiting a recurring natural experiment: maritime disasters in the Spanish Empire (1531-1810) which resulted in the loss of substantial amounts of silver money. We find that negative money supply shocks caused Spanish real output to decline. A transmission channel analysis highlights slow price adjustments and credit frictions as mechanisms through which money supply changes affected the real economy. Especially large output declines occurred in textile manufacturing against the backdrop of a credit crunch that impaired merchants' ability to supply their manufacturers with inputs.