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Climate, Technology, and the Evolutionof Political and Economic Institutions
Stephen HaberStanford University
CES-IFOUniversity of Munich
June 2013
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The Puzzle
Why are some countries characterized by enduringdemocracy, while other countries arecharacterized by persistent autocracy?
There is broad agreement that democracy iscorrelated with high per capita GDP and lowlevels of income inequality.
But the evidence suggests that some underlyingprocess jointly determined GDP/c, incomedistribution, and democracy.
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Finding 1:There is a non-linear relationship between the level of
rainfall and the level of democracy across the 20th century
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This finding is robust to including newcountries created after World War I
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It is also robust to including countries thatonly came into existence after thedecolonization wave of the 1960s
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This finding is also consistent with the naturalexperiment created by the dissolution of the USSR
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The pattern holds even if we just lookat the heyday of European Fascism
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Two steps in exploring themechanism
1. Specify a theory from first principles2. Test that theory against: Cross-country regressions A series of natural experiments A series of historical comparisons Studying the characteristics of outliers
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What other outcome, directly related to rainfall,displays similar discontinuities at 540 and 1200mm?
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Implication: there is a positive relationshipbetween soils suited for rainfed cereals
and the level of democracy
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An even starker way of seeing the pattern
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The cereals-democracy finding is robustto possible exogenous confounders!"#$%&'
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What is it about rainfedtemperate crops and democracy?Biological characteristics of rainfed temperate crops, plus
modern technologies of production of those cropsmeant that economic agents in temperate zones werelikely to solve problems of scarcity through trade.
Economic agents in temperate zones therefore had greaterincentives to trade, specialize (invest in human capital),and erect institutions that protected property rights.
Societies in temperate zones were more likely to go down ahistorical path of institutional development that resultedin a high level and broad distribution of human capital,and that gave rise to institutions that limited the state.
Democracies were more likely to emerge and survive inthose “high transaction” societies.
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There are fundamental biological differences betweentemperate crops and tropical crops. The former tend to
be highly storable, the latter tend to decay quickly.
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Production shocks tend to beidiosyncratic, not systemic, in the
production of rainfed temperate cropsRainfed temperate crops can fail in one
locality, but succeed in an adjoining locality,because of minor variations in the weather
Irrigated crops tend to be subject toaggregate, not idiosyncratic shocks
Tropical crops tend to be subject to aggregateshocks.
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Early modern and modern technologies for producingrainfed temperate crops allow them to be grown atsmall scales of production--less so for tropical crops
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Access to water is not a barrier to entry in theproduction of rainfed temperate crops
As compared toirrigatedcrops grownin deserts(whoevercontrols thewater cansiphon off thesurplus)
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Moderate rainfall agriculture gives riseto transactional societies, conducive to
democracy
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Imagine a group of farmers,producing under rain-fed conditions
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There is a set of possible transactionsthat would allow them to mitigateidiosyncratic production shocks
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But those transactions require an entitythat can facilitate transactions (enforce
contracts and property rights)
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Those institutions create incentivesto specialize (and develop human
capital to do so)
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This is a dynamic process characterized by increasingreturns: a state the facilitates transactions creates incentives
for trade and specialization, which creates incentives forhuman capital investment, which furthers the institutions that
support transactions…
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Irrigation-dependence gives rise to insuranceStates, democracy is less likely to endure
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The threat of scarcity is not solved throughtransactions among equals, but by a taxation-
insurance relationship with a monopsonist state
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Prior to modern technologies of storageand transport high rainfall gave rise to
stateless societies
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The stateless society of independentfarmers producing a non-storable crop
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Modern technologies of transportation gave rise tovertically integrated states; democracy not likely to endure
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What happens when the plantationcomplex of the modern world
backward integrates into politics?
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Testable ImplicationsThere should be a relationship between soils suited for rainfed
cereals and the level and distribution of human capital in thepast.
There should be a relationship between human capital in the pastand democracy measured today.
There should be a relationship between soils suited for rainfedcereals and institutions that protect contract and property rightsmeasured in the past.
There should be a relationship between institutions that protectcontracts and property rights measured in the past and thedemocracy measured today.
There should a relationship between soils suited for rainfed cerealsand the density of local and regional trade in the past.
There should be a relationship between the density of local andregional trade in the past and democracy measured today.
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We do observe the predicted relationship betweensoils suitable for growing rainfed temperate crops and
human capital (measured a century ago)
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We also observe a relationship betweenhuman capital (measured a century ago) and
average polity in recent decades
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Going beyond regressions:Natural Experiments
1. The dissolution of the USSR2. Santa Fe, Argentina3. The Australian Penal Colony4. The Maryland Colony5. The English Caribbean6. The Hawaiian Republic (and Bayonet
Constitution of 1887)
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Going Beyond Regressions 2:Comparative History
What were the conditions that sustainedthe democracies of antiquity (in Greeceand Rome), as compared to theconditions that sustained theautocracies of Mesopotamia, Egypt,and the Persian Empire?
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The Greek Democracies and the Roman Republicwere built upon societies of grain growing farmers
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Going Beyond Regressions 3:Learning from Outliers
Who are the democratic outliers in the soil suitability data series?1. Costa Rica (cereal SI=4)2. Colombia (cereal SI=6)3. Norway (cereal SI=6)4. Trinidad (cereal SI=6)5. Jamaica (cereal SI=9)6. Switzerland (cereal SI=10)7. Finland (cereal SI=10)Three of the four tropical outliers are coffee producers--and coffee
is highly storable and can be grown on small farmsTwo of the four tropical outliers (Trinidad and Colombia) are major
oil producers (along with one of the three European outliers,Norway)