Borders Change, Institutions Remain

Andrew Jonelis, Syracuse University

This paper examines how the institutional history of local areas affects the modern concentration of economic activity. Combining data about national institutions with historic border changes over the past two hundred years, I have determined the institutional experience of local areas around the globe. Using night light intensity as a proxy for economic activity, I show that a longer experience of more open political institutions is correlated with greater economic development. This relationship is robust to controlling for a broad set of geographic determinants of economic activity. Additionally, to address any reverse causality of more economic development leading to a longer history of more open institutions, I instrument for a local area’s institutional experience with the initial and minimum value observed over the past two hundred years. The effect of a longer history of more open institutions remains robust to the instrumental variables approach.

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 Presented in Session 80. Maps and geospacial data