History & Economic Development, Part 2

Jared Diamond’s Guns, Germs, and Steel blew my mind when I first read it years ago and I continue to use it in my Graduate development course.  Among other things, he discusses which regions first moved from hunting and gathering to settled agriculture (called the Neolithic Revolution) and why.  He goes on to show how this revolution gave these regions a big jump up in terms of economic development, showing that early geography mattered a lot for regional development and led to some path dependence.  What’s also interesting, however, is that geography wasn’t fate.  The Fertile Crescent, the region which first moved to settled agriculture, is hardly a bastion of high economic development today.

Along those lines, Ola Olsson and Christopher Palk have an interesting new working paper entitled “Long-Run Cultural Divergence: Evidence From the Neolithic Revolution.”  It turns out that the early leg up has implications for current political development too.  Here’s the abstract:

This paper investigates the long-run influence of the Neolithic Revolution on contemporary cultural norms and institutions as reflected in the imension of collectivism-individualism. We outline an agricultural origins-model of cultural divergence where we claim that the advent of farming in a core region was characterized by collectivist values and eventually triggered the out-migration of individualistic farmers towards more and more peripheral areas. This migration pattern caused the initial cultural divergence, which remained persistent over generations. The key mechanism is demonstrated in an extended Malthusian growth model that explicitly models cultural dynamics and a migration choice for individualistic farmers. Using detailed data on the date of adoption of Neolithic agriculture among Western regions and countries, the empirical findings show that the regions which adopted agriculture early also value obedience more and feel less in control of their lives. They have also had very little experience of democracy during the last century. The findings add to the literature by suggesting the possibility of extremely long lasting norms and beliefs influencing today’s socioeconomic outcomes.