Proposal preview

The Economics of Nationalism in Historical Perspective

Nationalism and awareness of it has recently been rising again across the world. The historical literature understands nationalism as a modern phenomenon and links the spread of nationalism to economic development driven by technological change such as printing or the telegraph and a growing division of labor (Anderson 1983, Gellner 1983). Economists instead often consider nationalism as a sign of backwardness or ignore it altogether. Economic history has focused on issues like protectionism but has paid limited attention to broader types of nationalism so far. Hence, the potential of the field remains largely unexplored, especially when it comes to testing new theories from identity economics and evidence based on modern econometric analyses and more granular data. We aim to analyze the link between economics and the spread of nationalism by means of quantitative case studies from the nineteenth and twentieth century and sound identification strategies.

Therefore, we aim to bring together the frontier research on this topic by asking the following questions: How do nationalist politics and identity formation interact with trade, economic inequality, industrialization, the spatial dimension of economic activity and technological change? How can we measure nationalism? Which theoretical approaches help us in order to conceptualize nationalism? What is the role of media for the spread of nationalism?

Organizer(s)

  • Nikolaus Wolf Humboldt-Universität zu Berlin nikolaus.wolf@wiwi.hu-berlin.de Germany
  • Felix Kersting Humboldt-Universität zu Berlin f.kersting@hu-berlin.de Germany

Session members

  • Yu Sasaki, Waseda Institute for Advanced Study
  • Charlotte Bartels, German Institute for Economic Research
  • Eric Melander, University of Warwick
  • Young-ook Jang, LSE
  • Jacob Metzer, Hebrew University of Jerusalem

Discussant(s)

Papers

Panel abstract

Nationalism and awareness of it has recently been rising again across the world. The historical literature understands nationalism as a modern phenomenon and links the spread of nationalism to economic development such as printing or a growing division of labor. Economists instead often consider nationalism as a sign of backwardness or ignore it altogether. Economic history has focused on issues like protectionism but has paid limited attention to broader types of nationalism so far. Hence, the potential of the field remains largely unexplored, especially when it comes to testing new theories from identity economics and evidence based on modern econometric analyses. Therefore, we aim to bring together the frontier research on this topic by asking the following questions: How do nationalist politics and identity formation interact with trade, economic inequality and economic geography? How can we measure nationalism? Which theoretical approaches help us in order to conceptualize nationalism?

1st half

Wilhelm Rising: First Names and National Identity in 19th Century Germany

Felix Kersting, Nikolaus Wolf

Culture and Growth: Evidence from Europe, 1400-1850

Yu Sasaki

Does culture explain economic growth? This paper draws on a growing body of empirical research in political economy and economic history to address this question by focusing on early-modern Europe. I argue that cultural consolidation within state reduces transaction costs of communication and facilitates growth. Extant scholarship tends to use time-invariant measures of culture to assess culture's (long-running) impacts on individual preferences for growth-enhancing activities, interpersonal trust, institutional choices, and other outcomes. I exploit recent advances in political economy and economic history that use time-varying proxies for culture to identify a causal channel between culture and economic growth and provide quantitative evidence. More specifically, I proxy cultural consolidation by taking time elapsed since the adoption of the printing press to examine European economic growth between 1400 and 1850. My analysis joins a growing body of empirical work on the origins of the "First Great Divergence" of 1500-1800, the period of...

Does culture explain economic growth? This paper draws on a growing body of empirical research in political economy and economic history to address this question by focusing on early-modern Europe. I argue that cultural consolidation within state reduces transaction costs of communication and facilitates growth. Extant scholarship tends to use time-invariant measures of culture to assess culture's (long-running) impacts on individual preferences for growth-enhancing activities, interpersonal trust, institutional choices, and other outcomes. I exploit recent advances in political economy and economic history that use time-varying proxies for culture to identify a causal channel between culture and economic growth and provide quantitative evidence. More specifically, I proxy cultural consolidation by taking time elapsed since the adoption of the printing press to examine European economic growth between 1400 and 1850. My analysis joins a growing body of empirical work on the origins of the "First Great Divergence" of 1500-1800, the period of the first sustained growth in per capita income that gave Western Europe a substantial advantage over other regions of the world. Previous research points to factors such as the rise of Atlantic trade and the adoption of the potato. My paper focuses on cultural consolidation as an alternative path. This paper offers a conceptual framework that captures culture's impacts on economic growth and quantitative evidence. Recent research shows that in Europe, the adoption of general-purpose technologies such as the printing press (and the mechanical clock) is positively linked to growth-enhancing activities, particularly literacy. For instance, print technology substantially accelerated the book trade, which gave rise to the "reading public" that includes lawyers, court workers, state officials, and merchants (Baten and van Zanden 2008; Buringh and van Zanden 2009; Dittmar 2011). The Protestant Reformation that began in the 1510s also positively affected literacy. Through the movement Luther and his followers used the ability of printing technology not only to mass-produce propaganda sheets but also to disseminate church ordinances to promote lay literacy (Dittmar and Meisenzahl 2016; Rubin 2014). This historic event may have triggered an onset of the development of individual cognitive skills in Germany (Cantoni, Dittmar, and Yuchtman 2016). Finally, the printing press lowered transaction costs of communication by encouraging individuals to use their vernacular over Latin (Anderson 2006). It reduced the cost of becoming literate, which gave modern intellectuals in many ethnic groups to standardize vernaculars to preserve their culture (Sasaki 2017). Drawing on this recent research, my conceptual framework shows that time elapsed since print adoption is a useful proxy to measure the degree to which cultural consolidation via literacy within country advanced. I test this hypothesis by compiling a time-series and cross-sectional data set on 25 European countries from 1400 to 1850. My outcome variable is population change, the standard proxy for economic growth in preindustrial times. I also include similar measures for robustness, including GDP per capita and urbanization rates. My main explanatory variable is time elapsed since the adoption of print technology by taking the first date of print arrival for each country. I also draw on the production of manuscripts and printed books for additional measures. I control for political institutions such as executive constraints, geographical factors such as absolute latitude, and other covariates such as war frequency, Atlantic trade, and access to universities. I use the difference-in-difference method for the main estimator but adopt an instrumental-variable (IV) approach by taking the geographical distance to Mainz, the birthplace of the Gutenberg press, as a source of exogenous variation for the spread of the press for causal identification.

Creating 'Us and Them': Racial Propaganda, Insularity and Right-Wing Ideology

Eric Melander

What determines the efficacy of identity-based propaganda, and how long-lasting are its effects? To shed light on these questions, I study the impact of the Swedish State Institute for Race Biology's popularisation of race biology on right-wing ideology in the short and long run. In a popular book edition of its systematic classification of the Swedish population according to "Nordic purity", the Institute identified particularly "pure" areas of the country. Implementing a differences-in-differences strategy, I document the effect of the publication on right-wing ideology: following the publication, election districts of above-median "Swedishness" exhibit a 3.4 percentage point relative increase in the vote share of right-wing parties. This effect is concentrated in areas with little immigration, suggesting that insular communities may be particularly susceptible to this type of racial rhetoric. Using data on library funding as a proxy for the accessibility of the book, I show that districts with good access...

What determines the efficacy of identity-based propaganda, and how long-lasting are its effects? To shed light on these questions, I study the impact of the Swedish State Institute for Race Biology's popularisation of race biology on right-wing ideology in the short and long run. In a popular book edition of its systematic classification of the Swedish population according to "Nordic purity", the Institute identified particularly "pure" areas of the country. Implementing a differences-in-differences strategy, I document the effect of the publication on right-wing ideology: following the publication, election districts of above-median "Swedishness" exhibit a 3.4 percentage point relative increase in the vote share of right-wing parties. This effect is concentrated in areas with little immigration, suggesting that insular communities may be particularly susceptible to this type of racial rhetoric. Using data on library funding as a proxy for the accessibility of the book, I show that districts with good access drive the results. Media is critical in propagating the effect: the "Swedishness" effect is present only in regions with high levels of exposure to race-biological news media. I corroborate my findings with data on the complete incoming correspondence of the Institute, showing that above-median "Swedish" regions become more directly involved with the Institute after the publication of the book. Finally, the rightward turn appears to persist over time: present-day municipalities in formerly above-median "Swedish" regions exhibit a higher relative vote share for the Sweden Democrats, a populist party with roots in the extreme right.

2nd half

Land Regimes in Nation-Building Processes and Nation-States: The Case of Israel in Comparative Perspective

Jacob Metzer

Nationalism is typically fed by various collective attributes, such as language, culture, history, myths, and traditions. These are mostly grounded in, and shaped by, the territorial habitat of the people concerned and become identifying characteristics of the modern nation-state. It is, therefore, only natural that the political and cultural attributes of territory have occupied a central place in the existing literature on nationalism. But instrumental as these attributes have been in identifying the nation as a territorial bodypolitic, the economic dimensions of the nation's territory have been important enough in the history of nations to deserve a concerted treatment in their own right, and that is what my paper aims to do. In comparatively examining the role of land in Jewish nation-building in Israel, this paper seeks to illuminate the perception of land and its uses by territorial nations and its implications for the nature of land regimes, property rights...

Nationalism is typically fed by various collective attributes, such as language, culture, history, myths, and traditions. These are mostly grounded in, and shaped by, the territorial habitat of the people concerned and become identifying characteristics of the modern nation-state. It is, therefore, only natural that the political and cultural attributes of territory have occupied a central place in the existing literature on nationalism. But instrumental as these attributes have been in identifying the nation as a territorial bodypolitic, the economic dimensions of the nation's territory have been important enough in the history of nations to deserve a concerted treatment in their own right, and that is what my paper aims to do. In comparatively examining the role of land in Jewish nation-building in Israel, this paper seeks to illuminate the perception of land and its uses by territorial nations and its implications for the nature of land regimes, property rights in land, and territorial sovereignty. My comparative account of land-related policies in Israel and elsewhere is based on the conceptual distinction between nationalist and liberal perceptions of land, offered by the political scientist Jacob Levy in his book, The Multiculturalism of Fear, 2000. In the nationalist perception, land is perceived as place - a homeland belonging to the nation (or to the people, ethnically or otherwise defined), from which no part could be taken away. This approach leads to the inalienability of land, and to eliding, or at least blurring, the distinction between territorial sovereignty and land ownership. The liberal approach, on the other hand, regards land as fungible and alienable property. As such, it embraces a clear distinction between sovereignty and land ownership. The cases which are discussed in the paper reveal that the distinction between ethnonationalist and liberal attitudes toward rights in land, although not clear-cut in the real world of states, serves us well typologically. It provides useful insights on the relationships between territorial sovereignty and land ownership, and assists us in identifying nationalist attributes in land regimes, including those of a liberal nature. It is shown that such attributes may be found in nationally motivated constraints imposed on the entry to the states’ land markets, and in using land allocation policies to strengthen the spatial grip of the ethnic majority in ethno-nationally divided states. In rather different instances, these attributes are observed in the accommodation of sorts of indigenous customary land rights within otherwise free-market based land regimes. As for the Israeli story, it is demonstrated that while liberal attitudes had not been absent from the debates of the 1950s about the appropriate land regime to be formed in the new state, the nationalist approach prevailed. Moreover, consistent policies of intensely using the allocation of (leasehold) rights in land in order to strengthen the spatial position of the Jews, made Israel's nation-building a clear and rather extreme example in which securing the possession of land by the ethno-national majority has been perceived to be a necessary means for cementing the territorial integrity of the state and hence its sovereignty.

The Political Economy of Inequality - Evidence from German Regional Panel Data

Charlotte Bartels, Felix Kersting, Nikolaus Wolf

The Road Home: the role of ethnicity in Soviet and post-Soviet migration

Young-ook Jang

The conventional wisdom in the migration literature is that potential migrants decide to move when the destination can offer better economic opportunities than the source. However, in the Soviet and post-Soviet context, I argue that ethnic identity was as important as economic conditions in determining migration decision and destination choice. To support this argument, I first construct a novel dataset as to the regional net migration rates of major ethnic groups and then regress them on ethnic and economic variables. The USSR had been home to over 100 different ethnic groups, including 15 titular nationals (e.g. ethnic Russians, Ukrainians, Kazakhs, etc.) and many ethnic minorities (Germans, Jews, Tatars, etc.). The Soviet leaders’ efforts for balanced regional development and “ethnic mixing” left these different ethnic groups spread across its vast territories. The sudden collapse of the Soviet Union, however, brought many changes to these ethnic groups. Many of them had to...

The conventional wisdom in the migration literature is that potential migrants decide to move when the destination can offer better economic opportunities than the source. However, in the Soviet and post-Soviet context, I argue that ethnic identity was as important as economic conditions in determining migration decision and destination choice. To support this argument, I first construct a novel dataset as to the regional net migration rates of major ethnic groups and then regress them on ethnic and economic variables. The USSR had been home to over 100 different ethnic groups, including 15 titular nationals (e.g. ethnic Russians, Ukrainians, Kazakhs, etc.) and many ethnic minorities (Germans, Jews, Tatars, etc.). The Soviet leaders’ efforts for balanced regional development and “ethnic mixing” left these different ethnic groups spread across its vast territories. The sudden collapse of the Soviet Union, however, brought many changes to these ethnic groups. Many of them had to face the nationalist policies of independent former Soviet Union (FSU) republics arising during the state-building process in the 90s. Also, the policymakers have incentives to increase ethnic homogeneity by attracting their co-ethnics abroad to avoid the negative impact of ethnic fragmentation. These formed push and pull factors and may have worked to reverse the trend of “ethnic mixing” toward “ethnic un-mixing”. This reverse is clearly seen in the dataset newly constructed using a residual method based on the Soviet and post-Soviet census data and administrative vital records. The dataset shows that many titular nationalities which had been distributed across the Soviet territories moved towards their own titular FSU states, e.g. Kazakhs to Kazakhstan or Ukrainians to Ukraine after the collapse. This implies that the potential migrants did consider the ethnic affinity when they decide to move or choose the destination. Furthermore, econometric analyses also confirm the influence of the ethnic variable on migration decision. The OLS and Heckman 2-step estimations consistently show a positive and significant effect of the share of an ethnic group in a region on their net migration rates. This means that the migrants are more likely to decide to move out of a region when they have fewer co-ethnics in the region and/or they tend to choose the destinations where the proportion of their co-ethnics in the regional population is high. The results are robust to the changes in the combination of other control variables, such as wages, housing space, weather, crime rates, the number of medical staff, etc. In sum, I argue that the ethnic identity worked as a crucial factor shaping the migration patterns during the transition period. The construction of data regarding ethnic migration was entirely new in the literature and the quantitative analysis significantly improved from some econometric studies dealing with an ethnic aspect of post-Soviet migration. The closer look at the ethnically driven Soviet and post-Soviet migration is expected to explain the recent rise of soil-and-blood type nationalism which has been conspicuous in the worldwide anti-immigrants atmosphere, notably Brexit and Trumpism.