Lecture 4

# Lecture 4

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Unformatted text preview: ocial capital on per capita income in the city. Social capital is measured with the number of non-profit organizations per 1000 inhabitants. The first two columns show OLS estimates; the remaining columns show I.V. regressions. In columns (3), (4) and (5) the instrument is the indicator for Commune; in column (6) the instrument is the log of the length of independence (the variable is zero if the city was not independent). In column (7) the instruments are: an indicator of whether the city was a Bishop city in 1000 C.E. and an indicator of whether the city was founded by the Etruscans. The last row shows the F-test for the excluded instruments in the first stage regression, and the p-value of the Sargan test for the validity of the excluded instruments. Robust standard errors are reported in parentheses. *** significant at less than 1%; ** significant at 5%; * significant at 10%. (1) OLS Social capital Elevation Max difference in elevation On the coast More than 5km from the coast Intersection of Roman roads Population (million people) Population squared Gini inequality index of land ownership (2) OLS 0.38*** (0.04) -0.69 (0.62) -0.48** (0.22) -0.16 (0.32) -0.05 (0.47) -0.01 (0.24) 11.05*** (2.35) -7.20*** (2.06) -0.18 (0.70) (3) I.V.: Commune 0.57*** (0.13) -1.02* (0.61) -0.45** (0.20) -0.01 (0.31) 0.06 (0.44) -0.15 (0.27) 13.15*** (1.75) -8.61*** (1.68) -0.13 (0.66) (4) I.V.: Commune 0.56*** (0.19) -1.00 (0.65) -0.45** (0.20) -0.02 (0.33) 0.06 (0.45) -0.15 (0.27) 12.77*** (2.77) -8.34*** (2.22) -0.12 (0.65) 0.40*** (0.04) -0.72 (0.62) -0.48** (0.22) -0.11 (0.32) -0.03 (0.47) 0.04 (0.24) 13.61*** (1.85) -9.03*** (1.79) -0.26 (0.70) YES YES 400 (5) I.V.: Commune 0.56*** (0.21) -1.01 (0.64) -0.46** (0.21) -0.03 (0.40) 0.06 (0.45) -0.15 (0.27) 12.73*** (2.91) -8.31*** (2.29) -0.12 (0.65) 0.00 (0.01) YES YES 400 (6) I.V.: length of indip 0.57*** (0.22) -1.08* (0.65) -0.49** (0.21) -0.03 (0.41) 0.11 (0.47) -0.11 (0.27) 12.44*** (2.95) -8.03*** (2.31) -0.30 (0.65) 0.00 (0.01) YES YES 383 YES NO 400 YES YES 400 YES NO 400 29.68 0.74 0.74 15.77 13.54 11.18 # of visitors per million people Province dummies Province capital dummies Observations Sargan test (p-value) F-test for excluded instrument R-squared (7) I.V.: Bishop + Etruscan city 0.81*** (0.30) -1.32* (0.74) -0.41* (0.23) 0.26 (0.50) 0.19 (0.51) -0.34 (0.33) 15.13*** (3.69) -9.90*** (2.81) -0.06 (0.73) -0.01 (0.01) YES YES 400 0.9763 3.95 74 Interpretations The authors use some very interesting historical sources of variation in cities and political institutions. It seems very hard to argue however that having been a commune in the middle ages only in‡uences the income of a city today via its in‡uence on social capital. Communes may well have had higher amounts of trust and may have generated such trust which was necessary for business etc. but they obviously also were very di¤erent in terms of political institutions and many other things. Very likely that there has been a path dependent process of institutional development over the period since 1300 which in‡uences institutions and incomes today. James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis September 16, 2008 19 / 24 A Generalized Norman Hypothesis If one was going to look at the impact of Norman institutions on social capital and long-run growth one might be concerned that the Norman’ invaded and ‘ s refor...
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## This document was uploaded on 02/28/2014 for the course ECON 2328 at Harvard.

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