Modernizing
Selection, Patience, and the Interest Rate
Radoslaw Stefanski & Alex Trew
Journal of Political Economy Macroeconomics, forthcoming
Abstract:
The interest rate has been falling for centuries. A process of natural selection that leads to increasing societal patience is key to explaining this decline. Three observations support this mechanism: patience varies across individuals, is inter-generationally persistent, and is positively related to fertility. A calibrated dynamic, heterogenous-agent model of fertility permits us to isolate the quantitative contribution of this mechanism. We find that selection alone is the key to explaining the decline of the interest rate.
Comparing the Determinants of Worldwide Homicide and Terrorism
Gary LaFree, Bo Jiang & Yesenia Yanez
Journal of Contemporary Criminal Justice, forthcoming
Abstract:
Over the past two decades, the study of terrorism has been increasingly integrated into mainstream criminology. Like other types of criminal behavior, terrorism can be divided into etiology (an emphasis on "breaking laws") and criminal justice (an emphasis on "making laws" and "reacting toward the breaking of laws"). Moreover, like the study of crime, the study of terrorism is inherently multidisciplinary. Nevertheless, terrorism differs from more common forms of crime in fundamental ways: Terrorist perpetrators, unlike common criminals, rarely see themselves as criminal, often seek rather than eschew publicity, and often have broader political goals. Despite similarities and differences, we could identify little prior research that has directly compared the determinants of terrorism and more ordinary types of crime. In this article, we create large cross-national datasets on homicides and terrorist attacks and then compare the effects of a set of common economic, political, and social variables on each. We find a good deal of similarity in the determinants of the two types of violence. Both homicide and terrorism are more common in countries with high GDP, high percent urban, high ethnic fractionalization, and in countries moving toward democratization. Both homicide and terrorism are low in countries experiencing high globalization. Although homicides are more common in countries experiencing high levels of inequality and poverty, neither of these two variables is significantly associated with terrorist attacks. We discuss the implications of the findings for theory, policy, and future research.
Reducing cartel recruitment is the only way to lower violence in Mexico
Rafael Prieto-Curiel, Gian Maria Campedelli & Alejandro Hope
Science, 21 September 2023, Pages 1312-1316
Abstract:
Mexican cartels lose many members as a result of conflict with other cartels and incarcerations. Yet, despite their losses, cartels manage to increase violence for years. We address this puzzle by leveraging data on homicides, missing persons, and incarcerations in Mexico for the past decade along with information on cartel interactions. We model recruitment, state incapacitation, conflict, and saturation as sources of cartel size variation. Results show that by 2022, cartels counted 160,000 to 185,000 units, becoming one of the country's top employers. Recruiting between 350 and 370 people per week is essential to avoid their collapse because of aggregate losses. Furthermore, we show that increasing incapacitation would increase both homicides and cartel members. Conversely, reducing recruitment could substantially curtail violence and lower cartel size.
Structural Transformation and Value Change: The British Abolitionist Movement
Valentín Figueroa & Vasiliki Fouka
NBER Working Paper, September 2023
Abstract:
What drives change in a society's values? From Marx to modernization theory, scholars have identified a connection between structural transformation and social change. To understand how changes in a society's dominant mode of production affect its dominant values, we examine the case of the movement for the abolition of slavery in the late 18th and early 19th century Britain, one of history's most well-known campaigns for social change, which coincided temporally with the Industrial Revolution. We argue that structural transformation alters the distribution of power in society and enables groups with distinct values and weak economic interest in the status quo to mobilize for change. Using data on anti-slavery petitions, membership in abolitionist groups, MP voting behavior in Parliament and economic activity, we show that support for abolition was strongly connected to manufacturing at the aggregate and individual level. We rely on biographical data and the analysis of parliamentary speeches to show that industrialists were relatively less reliant on income from slavery and were characterized by a universalist worldview that distinguished them from established elites. Together, our findings suggest that both values and economic interest play a role in driving social change.
The Developmental Legacies of Border Buffer Zones: The Case of Military Colonialism
Bogdan Popescu
Journal of Historical Political Economy, May 2023, Pages 31-63
Abstract:
How do countries in conflict manage their borders and what are the long-term implications? Little literature focuses on the developmental legacies of military buffer zones. The Habsburg Empire maintained for centuries military colonies along its southern border, where local populations provided military service in exchange for land. Using a geographic regression discontinuity design, I show that municipalities in modern-day Croatia within the former military colony have had less investment in infrastructure, lower interpersonal trust, and weaker trust in formal institutions. I argue that the intensity of imperial investment, the transformation and/or reorganization of local societies, and labor market inflexibility are key determinants in shaping these developmental legacies both in the short and long-run.
Spending a Windfall
Nuno Palma & André Silva
International Economic Review, forthcoming
Abstract:
We study the effect of the discovery of precious metals in America from 1500 to 1810 on international trade. Around 1500, there was a simultaneous discovery of precious metals and new trading routes. We construct a counterfactual of new routes but no precious metals. The discovery of precious metals increased the stock of precious metals more than 10-fold. We show that Euro-Asian trade at its peak increased up to 20 times compared with the counterfactual. Our simulations match the observed price dynamics. We find that precious metals were at least as important as the new routes.
Technical change and the postwar slowdown in Soviet economic growth in a long run perspective, 1885-2019
Leonard Kukić
Economic History Review, forthcoming
Abstract:
The existing studies usually find that technical change was very important in constraining the economic growth of the Soviet Union. While these studies have been successful in quantifying the extent of technical change, they have been less successful in quantifying its nature. This paper moves a step closer to probing the essence of Soviet efficiency by splitting the aggregate technical change into its subcomponents - namely, capital and labour efficiency. I find that the Soviet Union registered strong labour efficiency gains during most of the postwar period, converging towards the labour efficiency level of the global frontier - the US. Labour efficiency growth did decrease over time, but labour efficiency was not a primary cause of Soviet growth retardation. That retardation was instead caused by a decline in capital efficiency. At a disaggregated level, I find that the decrease in capital efficiency was driven by structures. I hypothesize that labour shortages and an inadequate investment policy resulted in a large stock of unfinished, and hence idle, structures, distorting Soviet economic growth.
Illegal markets and contemporary slavery: Evidence from the mahogany trade in the Amazon
Daniel Araujo et al.
Journal of Development Economics, January 2024
Abstract:
Modern slavery is a major global concern, with an estimated 49.7 million people enslaved in 2022. This paper explores the impact of illegal markets on this phenomenon, focusing on the complete shutdown of the mahogany market in the late 90s in Brazil. Utilizing a quasi-experimental research design that exploits the natural variation in the occurrence of mahogany trees in Brazilian municipalities, we employ novel administrative data on labor inspections to assess the effects of this shutdown on modern slavery. Our results indicate that the mahogany market shutdown significantly increased the probability of labor inspections discovering slave labor in affected municipalities. The outcomes are not influenced by coordinated police efforts targeting locations following the alteration in the law. We validate our findings with several robustness exercises.