Monday, November 19, 2012

Nunn: culture and economic development

Harvard economics professor Nathan Nunn has an excellent paper on culture and economic development in the April 2012 issue of Economic History of Developing Regions. This is no Clash of Civilizations - Nunn is much more rigorous than Huntington. In the article, Nunn argues that culture is a key factor explaining economic progress, and that understanding the interplay between culture and institutions is vital to acquire a full picture of historical development.

Nunn's most interesting example is the four waves of European settlers into the United States:

The first migrants were the Puritans (1629-1641) who settled in Massachusetts. These migrants, who were primarily middle class from East Anglia, migrated for religious reasons and because of intolerable conditions at home. The second wave of migrants (1642-1675) were the Cavaliers and with them indentured servants, who migrated from the South and Southwest of England to the Chesapeake Bay...The third wave (1675-1725) were the Quakers, who migrated to escape persecution in England. The Quakers, who tended to be lower middle class from Englands North Midlands, settled in the Delaware Valley. The final wave were the Scotch-Irish who migrated primarily for material reasons. They were from the borderlands of Northern England, Scotland and Ireland and settled in the backcountry of the US South. Although they were a mixed group, the majority were lower class 
....The Puritans, in addition to their well-known belief in the importance of universal education, were obsessed with maintaining proper order. The institutions they established - laws requiring universal education, high tax rates, sizable govern- ment intervention, and swift and brutal justice - clearly reflected this. In addition, a number of institutional structures, like the town meeting and town covenants, were transplanted directly from East Anglia. 
In contrast to the Puritans, the Virginia Cavaliers believed that inequality was natural. For them the ideal society was less about equality, but about maintaining order and the existing hierarchy. These values resulted in limited education, lower taxes, less government spending, and an informal system of justice based on hierarchical violence. 
The Quakers, although a religious group like the Puritans, had a very different notion of freedom. They believe in personal freedom, including freedom of choice and even freedom to make the wrong choice. This is very different from the Puritans who were obsessed with limiting individual freedom to maintain social order. The Quakersemphasis on personal freedoms strongly influenced the institutions that were established in the Delaware Valley. All citizens were granted equal access and rights to courts, the laws established emphasised personal rights and limited government intervention in personal and religious affairs, and punishments were much less brutal than in New England with a greater emphasis on rehabilitation. As well, taxation was much more limited than in New England. Tax laws required the consent of the people and expired every 12 months. 
The fourth group, the Scotch-Irish, believed in natural liberty: freedom from the constraints of the law, order and justice, and in minimal government, light taxes, and the right to armed resistance of authority. The institutions that arose in the Southern Backcountry were an outgrowth of these values. The emphasis on minimal government and freedom from the law resulted in a very limited justice system. Societies relied primarily on self-policing by ad-hoc vigilante groups (i.e., the 18th-century regulators); sheriffs were used only to patrol the public roads. Formal laws emphasised the importance of personal property and punished crimes against these rights much more severely than violent crimes against people. Like the legal institutions, the political institutions were also very informal, with no town meetings, and no local courts or commissions. 

The comparison with contemporary America is way too striking.  

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