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Inequality and conflict: historic studies of the impact of institutions on economic development

13rd National Competition for Economic Research Grants

Economic history

Senior Researcher : Jordi Domènech Feliu

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Research Centre or Institution : Universidad Carlos III de Madrid.


The starting point is the conception commonly adopted recently that agrarian inequality led to "extractive" institutions, using the language of Daron Acemoglu and James Robinson (2012) in Why Nations Fail or social orders with limited access in the conceptualisation of North, Wallis and Weingast, which set the affected countries on the road to authoritarianism, low education levels, lack of protection of property rights, corruption and general economic backwardness. In these contexts, only the flourishing of a commercial class or the threat of revolution can lead to political and economic modernisation.

This project brings together a number of experts in economic history and politics, to explore the legacy of agrarian inequality on institutions, conflict and development in the long term, studying historic cases such as Spain, Italy, Denmark, France and Argentina in the 19th and 20th centuries. The aim of the project is to give a historic vision based on the relation between inequality, conflict and redistribution and their effects on long-term development which is not based on excessively simplified transitions from "extractive" to "inclusive" and democratic institutions or from limited-access social orders to open orders. In particular, we focus on three factors which we believe to be fundamental. First, the existence of multiple possible balances between inequality, conflict and development based on other important variables such as changes in the distribution of property rights, structural change, the integration of markets, commercialisation and globalisation or technical change. Second, the political literature highlights the difficulties of collectively organising the poorest tiers of society and how the strategies of political and economic elites can have mobilising or demobilising effects on the agrarian population which could extend the conflict to areas not affected by excessive inequality, which would be especially relevant in the processes of political transition. Third, there is a continuum of experiences of authoritarianism and social orders with limited access: from confiscatory ones to those which preserve the existing distribution of property rights. In addition, democratising movements of the 19th century in some cases exacerbated inequality and the concentration of property or, in other cases, confiscated and redistributed on a large scale. Authoritarian or limited-access governments are not necessarily incompatible with the development of an autonomous civil society and, once again, there are multiple possible balances between authoritarianism and development. The threat to property rights is greatest with certain types of authoritarian governments and in "people's" democracies with absolutely no restrictions on executive power, but there is also a great deal of fluidity and numerous intermediate cases.

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