Convergence, Divergence, and Persistence [Unfinished]

Question 1

Nunn 2009

Answer 1

Good overview of institutional, factor endowment, and legal transplantation views.

Question 2

Guiso et al 2008

Answer 2

Argues that persistence in differentials between N and S Italy can be explained by persistence in social capital (culture, certain institutions) (Putnam).

Using exogenous measures of social capital (referenda turnout, non-profits per capita) (seem endogenous?), find that these correlate with historical free city-states (an N institution), and these then correlate with modern incomes. Trust and social capital needed for growth, particularly historically. The experience of free city-states fostered strong social capital in the community through culture (not formal institutions).

Social capital influences level of PG provision, and free city states emphasised collective service of common interests.

Instrument for status as a free-state with characteristics that made it less liable to Norman conquest (geog).

Results suggest that social capital drives income, not vice versa (not endogenous). At least 47% of N-S divide is due to free city states, with a key channel being social capital and trust.

Question 3

Pritchett 1997