Abstract
This paper provides a critical examination of effect of French Revolution institutions on regional economic development variations in 19th century by focusing on the experience of France. The argument in Daron Acemoglu et al. (2011) that differences in long-run economic performance of German states stem from differences in externally imposed French and domestic German institutions needs to be investigated further. A difference-in-difference estimation is used to identify a treatment effect causing growth differences between border and interior departments. The proposed treatment effect is the faster industrialization due to intensified minerals mining and railway construction in northern and northeastern France after 1850. It is shown that border departments experienced higher economic growth primarily after 1850 even though Revolution institutions and reforms were imposed in all of French departments. Therefore, externally imposed French Revolution institutions and reforms shouldn?t be counted as primary factors of causing variation in economic development across German polities.
Highlights
Literature SurveyThe French Revolution resulted in a large scale and long-term institutional transformation in Europe
In this paper we argue that since the French Revolution reforms and institutions were enforced across all regions in France, if, as hypothesized, it is found that there were significant regional growth differences in France, it would count as evidence against the hypothesis that the variations in regional economic development between the invaded and non-invaded German polities were caused by the Revolution institutions as proposed in Acemoglu et al (2011)
This paper focuses on the case of France, examines regional economic prosperity variations within France during the 19th century, and proposes a counterargument saying that the regional differences in institutions were not the only or leading reason in causing regional economic growth differences
Summary
The French Revolution resulted in a large scale and long-term institutional transformation in Europe. To do this they compare the differences in the economic performance of those German states that were invaded by Napoleonic armies and adopted French institutions with other German states that retained German legal and economic institutions throughout Their empirical analysis results indicate that there remained a sustained difference in economic performance long after the invaders retreated, and they argue that the externally imposed French Revolution reforms and institutions were effective in leading the way to these regional economic development differences, especially in the second half of the 19th century. During the same time period intensive coal-iron ore-steel mining and railway construction (the proposed treatment effect in this study) took place in northeast-eastern France, Belgium, and southwest-western Germany These manufacturing and heavy industrial activities could very well have been effective in triggering further entrepreneurship and innovations, and generating more rapid and higher economic development in the above mentioned affected areas, leading the way to the industrial revolution in continental Europe. The situation that Acemoglu et al.’s (2011) result of positive long-term effects of externally imposed Revolution institutions and reforms, and the intensive coal-iron ore-steel mining and railway construction took place in the same time period, weakens the strength of Acemoglu et al.’s (2011) arguments and findings
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