Making Great
Enlightenment Ideals and Belief in Progress in the Run-Up to the Industrial Revolution: A Textual Analysis
Ali Almelhem et al.
Quarterly Journal of Economics, forthcoming
Abstract:
We trace the evolution of the language of science, religion, and political economy in the centuries leading to the British Industrial Revolution. Using textual analysis of 264,443 works printed in England between 1500 and 1900, we test whether British culture manifested a belief in progress associated with science and industry. Our analysis yields three main findings. First, there was a separation in the languages of science and religion beginning in the mid-18th century. Second, volumes using language at the nexus of science and political economy became more progress-oriented during the Enlightenment. Third, volumes using industrial language — especially those at the science-political economy nexus — were more progress-oriented beginning in the 18th century.
Genomic Evidence for Clark's Theory of the Industrial Revolution
Davide Piffer & Gregory Connor
National University of Ireland, November 2025
Abstract:
Clark (2007, 2025) posits that the Industrial Revolution of the eighteenth and nineteenth century was partly facilitated by a gradual evolutionary shift in the distribution of income-enhancing traits such as cognitive ability, thrift, and future-oriented behaviour. Using 600 genotyped DNA samples from Belgium, Denmark, England, Germany and the Netherlands from the eighth to nineteenth century we find a statistically significant positive time trend in educational attainment polygenic index scores. The upward shift in average scores on this genotypic index is large enough to serve as a contributory factor to the Industrial Revolution, consistent with Clark’s hypothesis. The positive trend becomes significant only in the period after 1350 CE.
Did Henry George Inspire China's Economic Miracle?
Wei Xu, Yi Huang & Ling Li
American Journal of Economics and Sociology, forthcoming
Abstract:
China's economy began to grow at an unprecedented rate around 1980 because of changes adopted under the leadership of Deng Xiaoping. He called it “socialism with Chinese characteristics.” The policy that launched those changes was the Household Contract Responsibility System (HCRS), which added private incentives to a production system based on social obligations. Viewed in that way, the HCRS bears a striking resemblance to the theory of American economist Henry George, who also sought to combine social responsibility and private initiative into a single system. Under the HCRS system, land belongs to the state, but farmers have the right to autonomous production and disposal of surplus products, greatly improving agricultural production efficiency and farmers' incomes. Under the system proposed by Henry George, land is held privately, but the full economic value of land is captured by the state in the form of a tax, so the net effect is almost exactly the same as a system of state-owned land. As with the HCRS, George's system allows workers to gain the full value of their labor after their social obligations (payment of the land tax) are met. Although the two systems are different, their deep structure converges around the interaction of social obligation and private initiative. Both are systems designed to solve an ancient problem of how to extract revenue for public services with the least burden on the economy. The main difference between the two systems is that China actually adopted the HCRS -- leading to 30 years of astonishing economic growth, whereas Western nations continue to ignore Henry George's ideas and allow their economies to stagnate. Henry George did not inspire China's economic miracle, but the basic principles are the same.
Economic Development According to Chandler
Niklas Engbom et al.
NBER Working Paper, November 2025
Abstract:
Chandler (1977) shows that large firms require hierarchies of white-collar workers to coordinate complex production. We document that this insight continues to hold globally today, and we show that low education levels in developing countries limit the supply of white-collar workers and constrain firm size. We extend the occupational choice model of Lucas (1978) to allow entrepreneurs to reorganize their firms by allocating administrative tasks to hired professionals, which brings the firm closer to constant returns to scale. We calibrate the model to be consistent with cross-sectional microdata and validate it using quasi-experimental and experimental evidence on the effects of educational expansions and management training interventions. Skills explain two-thirds of the reorganization of production into large firms with economic development, while structural transformation and reductions in barriers are needed to explain the remaining shift.
Sentiment, productivity, and economic growth
George Constantinides et al.
Journal of Financial and Quantitative Analysis, forthcoming
Abstract:
Earlier research finds correlation between sentiment and future economic growth, but disagrees on the channel that explains this result. We shed new light on this issue by exploiting cross-sectional variation in country size and market efficiency. We find that sentiment shocks in the largest advanced economies increase economic activity, but only temporarily and without affecting productivity. Conversely, sentiment shocks in smaller or less advanced economies predict prolonged economic growth and a corresponding increase in productivity. The results support the view that sentiment can create economic booms, although only in economies where sentiment and fundamentals are harder to disentangle.
Evolutionary advantage of moderate fertility during Ming–Qing China: A unified growth perspective
Sijie Hu
Journal of Economic Growth, December 2025, Pages 497-519
Abstract:
Using genealogical records of Chinese families from 1300 to 1920, this paper examines how the fundamental wheels of change identified by Unified Growth Theory operated within the Ming–Qing context. It finds that families with moderate fertility were more likely to attain higher levels of education and to experience greater reproductive success across generations, revealing a trade-off between high fertility and long-term lineage outcomes. Employing negative binomial regression and instrumental variable methods, the study shows that a preference for child quality conferred an evolutionary advantage — suggesting that, if this evolutionary pattern was present globally during the epoch of stagnation, it may have been central to the demographic transition and the emergence of modern economic growth.
The Management of Aid and Conflict in Africa
Jacob Moscona
American Economic Journal: Economic Policy, November 2025, Pages 228-259
Abstract:
This study investigates the relationship between the management of development aid and violent conflict in Africa. I exploit variation in World Bank project management quality driven by the assignment of project leaders of varying ability, combined with geo-coded data on all projects linked to performance report cards. I find that better project management reduces violent conflict across subnational aid receiving regions. Poorly managed projects increase conflict while well-managed projects do the opposite. Project monitoring is particularly important, and management matters most in regions with a recent history of warfare and for large projects that involve the transfer of appropriable resources.
How culturally wise psychological interventions can help reduce poverty
Catherine Thomas et al.
Proceedings of the National Academy of Sciences, 18 November 2025
Abstract:
Poverty is characterized by multidimensional economic, social, and psychological constraints that undermine people’s agency to pursue new opportunities and shape their life outcomes. How can interventions best support the agency of low-income individuals and, in so doing, boost poverty-reduction efforts? We theorize and find that agency interventions are effective when designed to be “culturally wise,” i.e., attuned to the model of agency predominant in a cultural context. Focusing on low-income women in rural Niger, Study 1 finds that local mental models of economic success primarily reflect interdependence, grounded in relational factors like advancing social harmony, respectfulness, and collective benefits. As evidenced by data from a United States sample, this contrasts with a more independent model common in the West grounded in personal factors like self-initiative. Study 2 finds empirical support for relational factors (e.g., subjective social standing) in addition to self-oriented personal factors (e.g., self-efficacy) as mechanisms of women’s economic advancement in a highly effective multifaceted poverty reduction program. Study 3 reports a field experiment with program participants (n = 2,628) to compare a Western-derived personal agency intervention and a culturally wise relational agency intervention each to a control. Only relational agency caused significant improvements in economic outcomes over 12 mo, as well as in some personal and relational outcomes. By contrast, personal agency showed limited effects, shifting only personal outcomes. These findings reveal the promise of research at the intersection of social and cultural psychology, behavioral science, and development economics to help address global poverty.
The long shadow of history? The impact of colonial labor institutions on economic development in Peru
Leticia Abad & Noel Maurer
Journal of Economic Growth, December 2025, Pages 521-565
Abstract:
We examine a canonical case of forced labor: the mita and the encomienda in colonial Peru. The mita was a labor draft designed to provide workers for mines, churches, and public works in colonial Peru and Bolivia. The encomienda granted a select group of Spanish settlers the right to extract labor and tribute from indigenous peoples. We examine the impact of forced labor using a dataset of 500 indigenous settlements scattered across modern-day Peru. We find that forced labor gravely impacted the Peruvian communities subjected to it, but the effects nearly dissipated before the end of the colonial period (1532-1811). We test for a possible “reversal of fortune” in the postcolonial period by looking at an array of variables for the 19th to the 21st centuries (literacy, access to land, road density, and luminosity) and find no significant differences. The results hold when we examine the mita and encomienda separately. The mechanisms that caused its impact to fade were migration, growing outside options for indigenous labor, and opposition from the Crown and new Spanish settlers who lacked access to forced labor.