Econometrica, 92(5): 1439–1472 (September 2024)
This paper studies the role of fiscal capacity in European state consolidation. Our analysis is organized around novel data on the territories and cities of the Holy Roman Empire in the early modern period. Territories implementing an early fiscal reform were more likely to survive, increased in size, and achieved a more compact extent. We provide evidence for the causal interpretation of these results and show key mechanisms: revenues, military investments, and marriage success. The imposition of Imperial taxes, quasi-random in timing and size, increased the benefits of an efficient tax administration on the side of rulers, driving the implementation of fiscal centralization. Within territories, Chambers became the dominant administrative institution, tilting the consolidating states toward absolutism.
Winner Unicredit Econ Job Market Best Paper Award 2019
Autocratic regimes can use carrots and/or sticks to prevent being overthrown by protests. Carrots, i.e. resource allocation, reduce the probability of protests, but cannot help to end them. Sticks, i.e. repression, reduce the probability that protests overthrow the regime, but also decrease its popularity. Using a difference-in-differences approach, I show that residential construction and military presence increase in protest municipalities after an uprising in 1953 in former East Germany. This cannot be explained by pre-existing differences, demand for housing, or external warfare considerations. Carrots were furthermore used to counteract sticks' negative effect on popularity. More construction is associated with more regime support.
We study the selection of the political elite in an autocratic state. Using detailed CV data on potential politicians in the German Democratic Republic, we track and quantify the position of individuals in the state hierarchy over time and exploit exogenous connections between individuals that were formed through imprisonment during the Nazi Era. We find asymmetric effects of being connected to the political elite: While being linked to the state’s centre of power harms high-profile careers, they have positive effects on low-profile careers. An extensive analysis of potential mechanisms shows that the negative effect of being linked to the party leadership on individuals’ probability to be part of the ruling elite is in line with anti-factionalism, whereas the positive effect on low-profile careers is in line with patronage.
This study documents the rise of individualism in response to rapid institutional change. In data on 44 million birth records we trace out how the dissolution of the Holy Roman Empire (1789–1815) impacted naming practices. We derive a set of namebased measures of cultural traits by drawing parallels to models of infrequent speech. Employing this methodology, we document a distinct shift in naming patterns and a move towards individualism. These patterns were more pronounced in places that became part of a new territory, resulting in cultural dispersion both within and across towns. Territorial borders were redrawn without regard to cultural concerns, and our results are not driven by changes in the supply of ideology or the composition of the population. Instead, we provide evidence that the experience of turnover set off a search for cultural traits suitable to the new institutional environment, with political uncertainty translating into a turn toward the individual.
Working Paper
We study the political consequences of inflation surprises, focusing on votes for extremist and populist parties in 365 elections in 18 advanced economies since 1948. Inflation surprises are regularly followed by a substantial increase in vote shares of extremist, anti-system, and populist parties. An inflation surprise of 10 percentage points leads to a 15% increase in their vote share, comparable to the increase typically seen after financial crises. We show that the change in voting behavior is particularly pronounced when real wages decline, and less evident when real wages are not affected. Our paper points to considerable political after-effects of unexpected inflation.
We review the literature on geoeconomics, defined as the field of study that links economics and geopolitics (power rivalry). We describe what geoeconomics is and which questions it addresses, focusing on five main subfields. First, the use of geoeconomic policy tools such as sanctions and embargoes. Second, the geopolitics of international trade, especially work on coercion and fragmentation. Third, research on the geopolitics of international finance, which focuses on currency dominance and state-directed capital flows. Fourth, the literature on geopolitical risk and its spillovers to the domestic economy, e.g. on investments, credit, and inflation. Fifth, the economics of war, in particular research on trade and war and on military production. As geopolitical tensions grow, we expect the field to grow substantially in the coming years.