Eric Chaney (Harvard) - The Medieval Origins of Comparative European Development: Evidence from the Basque Country

Presentation Date: 

Wednesday, September 3, 2014

Abstract: This paper investigates the present-day economic impact of medieval republican institutions along the historical borders of the Basque Country in Spain and France. I present evidence suggesting that medieval republican institutions have had a lasting effect: in Spain the drop in incomes along the Basque border is similar to that between the richest and poorest areas of the euro zone today. Using present-day and historical data, I investigate the mechanisms through which these medieval institutions have had enduring effects. Although I find evidence of significant cultural differences at the Basque border, results using institutional variation generated by the partition of Basque regions between France and Spain cast doubt on claims that these cultural differences are the fundamental cause behind today's economic differences. In addition, I track the evolution of a variety of variables in the border region back in time. While institutional differences remain observable in the 18th century, all other observable differences between Basque and surrounding areas vanish or become negative by this date. When taken in unison, the results suggest the importance of the historical emergence of republican institutions -and their subsequent persistence- in generating within-European differences in economic outcomes today.

See also: 2014