RESEARCH
The Diffusion of Ideas (Job Market Paper)
In recent decades, the literature in historical political economy has focused on ‘vertical learning’: the long-term persistence of norms, culture, and institutions through time, while we know relatively little about the diffusion of rapidly changing ideas through space (‘horizontal learning’). The goal of this paper is to contribute to filling this gap by studying the diffusion of ideas through informational networks, and the effect of shocks in spatial connections, specifically in the context of the German Empire. I address the following questions: how does higher network density affect ideas’ diffusion? Why do certain ideas (topics) become salient, in society and within epistemic communities, while others do not? And in turn, how representative is the political debate of issues salient in broader society? Merging insights from traditional work in political science on social movements (e.g. Tarrow 1996; Lohmann 1994, Berman 1997), the literature on knowledge production (e.g. Chaney 2009; Grossman and Helpman 1991; Perla, Tonetti and Waugh 2021), and the more recent network economics (Golub and Jackson 2010; Acemoglu, Ozdaglar and Tahbaz-Salehi 2015; Golub and Sadler 2016), I develop a model in which agents choose a topic to write on (an ‘idea’) and a level of novelty within that topic. Their choice aims at maximizing the expected success (future influence) of their ideas, which is informed by a noisy signal of the distribution of prevalent ideas within their epistemic community, in turn based on their neighbors’ choices. A key insight is that even without central planning, a (de-centralized) system of coordination for ideas’ selection emerges. Shocks to the network’s connections affect the concentration and heterogeneity of ideas, and the returns and riskiness of uncommon ideas. I test the implications of the model in the case of the main 2,300 German-speaking cities between 1750 and 1933. Within this time period, Germany goes from being intellectually backwards, and importing ideas from the rest of Europe, to receiving more Nobel prizes than any other country. How does a state achieve endogenous growth in intellectual production? I study the effect of increased density in spatial connections across cities, due to institutional and market integration, on the heterogeneity of ideas. To do so, I build two novel datasets. I operationalize the concept of ‘idea’ with the specific topic of a published book or article in any discipline – across sciences, social sciences, arts, and hu- manities. I collected the list of the 22 million items (books, articles, newspapers, etc.) published in Germany in this time period from the catalogues of all German-speaking libraries, institutes, and uni- versities. As one of the main shocks to connectivity between cities is the introduction of the railroad, I also collected yearly data from each railroad company on line openings, the number of passengers and goods transported, as well as construction permissions, and exogenous capital and construction shocks. Furthermore, to estimate the spatial clustering of topics and professions, I use the biographical information of 220,000 individuals; to control for population rates and other city-level characteristics I use data from the Deutsches Staedtebuch. With a spatial regression discontinuity design, I study the effect of incorporation into what will become the German empire. An event study design estimates the effect of the introduction of the railroad on the similarity of ideas between any pair of two cities. To assign topics and measure the relative similarity between them, I develop a topic model based on libraries’ pre-existing detailed classifica- tion schemes that, unlike other topic models, does not rely on researchers’ labels or chosen number of topics. The findings contribute to our understanding of the transmission of information through networks, and the spatial clustering of knowledge and innovation.
Technology and Inequality
with Torben Iversen
The ICT revolution has profoundly shaped economic geography, income inequality, firm organization; and political cleavages. But unlike the analysis of the industrial economy, notably the neo-corporatist and Varieties of Capitalism frameworks, we are lacking a synthetic theory of the knowledge economy, the different forms it takes, and the politics of change. Building on the new economics of networks, and integrating insights from the politics of the new economy with longstanding institutionalist arguments in comparative politics, this paper sketches such a framework and offers a preliminary test of some of its key implications. The aim of this paper is to explain this rise of regional inequality in Europe and the US in the past decades. We locate the driver of rising regional inequality in technological change, which is driven by knowledge-intensive businesses (KIBs) and their skilled workers co-locating in particular areas, notably densely populated metro clusters, where they induce innovation and rapid growth in productivity and incomes. As has been widely argued, this process of agglomeration has consequences for politics, in particular the division between cosmopolitan cities and more traditionalist peripheries, but the reverse is also true: while democratic governments have everywhere facilitated the transition to the new economy, governments have initiated a range of policies that have either amplified or dampened the concentration of innovation and distribution of skilled labor and income. We aim to understand the role of public policies in the location decisions of KIBs, and the political institutions that drive these policies. Most of our focus is on the geographical concentration of innovation and income within countries, using patent and labor force data, but we also address as second puzzle: that the US is the clear leader in most new technologies. It may not be an accident that the US is the both the technology leader and the country with the greatest geographical inequality in innovation.
DEMOCRACY & ITS OPPONENTS
A Wolf in Sheep's Clothes: Citizen Uncertainty & Democratic Backsliding
with Monika Nalepa and Georg Vanberg
A prominent contemporary phenomenon is “backsliding” of democratic countries into (semi-) authoritarian practices. Such episodes often unfold gradually over time in contexts where the ultimate intentions of governments are not clear. We present a model that focuses on the role of such uncertainty in backsliding. In the model, a government engages in a reform that may allow for subsequent actions that are inconsistent with the rule of law. Citizens must decide whether to replace the incumbent following the reform. Consistent with existing work, the model suggests that polarization increases democratic backsliding. More importantly, the model demonstrates that in a dynamic setting, citizens may support incumbent governments even if citizens are fundamentally opposed to authoritarianism. The less concerned citizens are about facing a potential autocrat, as in relatively well-established democracies, the more likely it is that even moderate levels of polarization can set off the process of democratic backsliding. We illustrate the model’s implications using a survey experiment in contemporary Poland.
Why did Conservatives Fear Democracy?
with Fabio Ellger, Brian Rathbun, and Daniel Ziblatt
Canonical works in political science and economics explain the success or failure of democratic transitions and the stability of democracy with reference to the preferences of predemocratic elites. For example, classic works ranging from Acemoglu and Robinson (2006) and Boix (2003) to recent works such as Albertus and Menaldo (2018) make predictions about the relationship of economic inequality and democracy, presuming a logic that economic redistribution under conditions of high economic inequality drives elite opposition to democracy. But are political economy motives the factors that actually historically drove conservative elite opposition to democracy? We examine this question by turning to the historical record of the predemocratic German Reichstag (1871-1933). We test the political economy assumption that fear of democracy was rooted in fear of redistribution vis-à-vis an alternative argument that conservatives in historical Germany resisted democratization out of a psychologically-rooted motivated-reasoning opposition to the leveling of social hierarchies and relative social status. We conduct a series of quantitative text analyses to unravel which narratives against democratization have been predominantly used by conservative parliamentarians and how their arguments changed over time. In addition, we present further historical evidence to substantiate our proposition of conservative social identity as a major motivation to maintain the status quo – and counteract democratic power sharing. Our findings contribute to the ongoing discussion about the role of conservative elites during the emergence of liberal democracy in Western societies.
POLITICAL ECONOMY
OF INNOVATION
STATE BUILDING & THE WELFARE STATE
Elites' Social Networks and The Origins of State Capacity
with Yuhua Wang
A key challenge for the early modern state was the integration of the periphery into the central state apparatus. Specifically, the central state faces a credible commitment problem when trying to extract resources from the periphery in exchange for protection and public good provision. In a simple model, we argue that marriage networks can make this commitment credible, by aligning the incentives of the elites in the periphery and the center. We find the process of social integration between center and periphery to be self-reinforcing. We evaluate our argument using the case of early modern Venice. We exploit an exogenous demographic shock that pushed the elites from the center to marry the elites from the periphery. Using a difference-in-differences design to compare families that were integrated into the nobility marriage networks earlier with those that were integrated later, we show that social integration is positively associated with investment in public debt. We also observe increased tax revenues from the provinces that had families integrated and more military spending and state institutions established in the integrated provinces. Our findings highlight the role of social networks in aligning the incentives of central and local elites in favor of a strong central state.
The Religious Origins of the Welfare State
with Francesca Miserocchi
How did the modern welfare state originate, and how did its origin affect its long-term development and efficiency? The literature has mostly pointed to the strength of the labor movement or social cleavages as determinants of welfare provision. Within the Italian post-unitary context, we take a different approach by highlighting that, in its early stages, welfare was not created anew by the state, but had instead been provided for centuries -- by institutions affiliated with the Catholic Church. We plan to study the effect of the incorporation of these institutions into the state apparatus in 1890. We thus link historical welfare provision to the quality of welfare once it was under state control, by focusing on charities that were previously run by the clergy and that had to switch to private or public administration. We expect the effect of the change in administration to be positive in the regions where state institutions originated, and negative in the regions where state institutions were exported and ineffective at the local level. Using detailed historical records of Church-affiliated charities, their services and budgets, we plan to use a difference-in-differences strategy to study the effect of state incorporation on welfare provision, health and literacy outcomes, institutional resource management and administrative change.
RACIAL & HEALTH INEQUALITY
What We Get Wrong About Closing the Racial Wealth Gap
with William Darity Jr., Darrick Hamilton, Mark Paul, Alan Aja, Anne Price, Antonio Moore
We address ten commonly held myths about the racial wealth gap in the United States. We contend that a number of ideas frequently touted as “solutions” will not make headway in reducing black-white wealth disparities. These conventional ideas include greater educational attainment, harder work, better financial decisions, and other changes in habits and practices on the part of blacks. While these steps are not necessarily undesirable, they are wholly inadequate to bridge the racial chasm in wealth.
Causes and Consequences of Malnutrition
with Giulia Chiopris
Understanding patterns in the prevalence and severity of malnutrition and recurrent childhood diseases is often difficult in low-income settings, due to the lack of reliable data. We study the entirety of hospital admissions in a pediatric hospital in Port Sudan, Sudan between February 2021 and February 2022. The analysis of 1,200 patients contributes to our understanding of the onset of malnutrition, gender and spatial differences in malnutrition and anemia, and the prevalence of genetic diseases.