Davide Cantoni, Cathrin Mohr, Matthias Weigand
"The Rise of Fiscal Capacity"
Current draft (July 2021): [pdf]
Abstract: We study the role of a crucial institutional innovation — the development of fiscal capacity through modern, permanent administrations — in fostering state consolidation in Europe in the Early Modern era. Using a novel dataset, we examine the introduction of fiscal centralization in territories of the Holy Roman Empire from 1400 to 1789. After implementing the reform, territories were more likely to survive, increased in size, and were able to achieve a more com- pact territorial extension. We show that increased revenues, a reduction of short-term lending, more investments in military infrastructure, improved defensive capability, and a higher ability to marry off daughters to powerful princes, were key mechanisms through which rulers were able to consolidate their territories. The absence of pre-trends, as well as the robustness of our results with regard to selection and endogeneity concerns, suggest that fiscal centralization played a causal role in this context. We argue that the external threat posed by the Ottoman Empire was a key driver of the adoption of fiscal centralization, independently of the rise and decline of deliberative bodies (Estates).
This paper supersedes a previous working paper titled, "Polls, the Press, and Political Participation: The Effects of Anticipated Election Closeness on Voter Turnout."
Abstract: In recent years, the outcomes of several high-stakes votes have not been correctly predicted by public opinion polls. We propose that polls themselves may shape election outcomes by affecting voter turnout. We first present evidence that polls have a causal effect on voter turnout, with greater turnout in response to close polls. To identify this effect, we exploit the precise day-level timing of the release of poll results for federal referenda, and a dataset on daily mail-in voting for the canton of Geneva. The release of a closer poll causes turnout to sharply rise immediately after poll release, with cumulative turnout remaining significantly higher through election day. Turnout rates are no different in the days prior to the release of close polls, suggesting that the information contained in the polls was not anticipated, issue types were not perceived as different, and the political "supply side" was not differentially active. We generalize our findings by specifying a model of voter turnout depending on locally available information and on the existence and closeness of polls. We confirm the predictions of the model using municipality-level data from across Switzerland, exploiting the introduction of national polls in 1998. We then provide evidence that this turnout effect can shape election outcomes. We find that the effect of close polls is heterogeneous, with an asymmetric effect leading to a higher vote share for the underdog, and effects varying with newspaper coverage of polls. The effect sizes we estimate are large enough to flip high-stakes election outcomes.
Previous draft (September 2017): [Munich WP]
Media Coverage: [ZEIT online] [Times] [Bloomberg] [Ara] [Economist] [Dagens Nyheter]
Abstract: We argue that persistence of right-wing ideology can explain the recent rise of populism. Shifts in the supply of party platforms interact with an existing demand, giving rise to hitherto invisible patterns of persistence. The emergence of the Alternative for Germany (AfD) offered German voters a populist right-wing option with little social stigma attached. We show that municipalities that expressed strong support for the Nazi party in 1933 are more likely to vote for the AfD. These dynamics are not generated by a concurrent rightward shift in political attitudes, nor by other factors or shocks commonly associated with right-wing populism.
Abstract: Which fundamental factors are associated with individuals holding democratic, anti-authoritarian ideologies? We conduct a survey eliciting Hong Kong university students' political attitudes and behavior in an ongoing pro-democracy movement. We construct indices measuring students' anti-authoritarianism, and link these to a comprehensive profile of fundamental economic preferences; personalities; cognitive abilities; and family backgrounds. We find that fundamental economic preferences, particularly risk tolerance and pro-social preferences, are the strongest predictors of anti-authoritarian ideology and behavior. We also study simultaneously determined outcomes, arguably both cause and consequence of ideology. Examining these, we find that anti-authoritarians are more pessimistic about Hong Kong's political outlook and about their fellow students' support for the movement; their social networks are more political; they consume different media; and, they are more politically informed than other students. Our extraordinarily rich data suggest that individuals' deep preferences should be considered alongside payoffs and beliefs in explaining political behavior.
Abstract: We study the causes of sustained participation in political movements. To identify the persistent effect of protest participation, we randomly, indirectly incentivize Hong Kong university students into participation in an antiauthoritarian protest. To identify the role of social networks, we randomize this treatment's intensity across major-cohort cells. We find that incentives to attend one protest within a political movement increase subsequent protest attendance, but only when a sufficient fraction of an individual's social network is also incentivized to attend the initial protest. One-time mobilization shocks have dynamic consequences, with mobilization at the social network level important for sustained political engagement.
Davide Cantoni, David Y. Yang, Noam Yuchtman, Y. Jane Zhang "Protests as Strategic Games: Experimental Evidence from Hong Kong’s Democracy Movement"
Quarterly Journal of Economics, Vol. 134, N. 2 (May 2019): pp. 1021–1077
Original article (open access): [QJE website]
Final draft (October 2018): [pdf]
Previous draft (January 2017): [NBER WP]
Abstract: Social scientists have long viewed the decision to protest as strategic, with an individual's participation a function of her beliefs about others' turnout. We conduct a framed field experiment that re-calibrates individuals' beliefs about others' protest participation, in the context of Hong Kong's ongoing anti-authoritarian movement. We elicit subjects' planned participation in an upcoming protest and their prior beliefs about others' participation, in an incentivized manner. One day before the protest, we randomly provide a subset of subjects with truthful information about others' protest plans, and elicit posterior beliefs about protest turnout, again in an incentivized manner. After the protest, we elicit subjects' actual participation. This allows us to identify the causal effects of positively and negatively updated beliefs about others' protest participation on subjects' own turnout. In contrast with the assumptions of many recent models of protest participation, we consistently find evidence of strategic substitutability. We provide guidance regarding plausible sources of strategic substitutability that can be incorporated into theoretical models of protests.
Davide Cantoni, Jeremiah Dittmar, Noam Yuchtman "Religious Competition and Reallocation: The Political Economy of Secularization in the Protestant Reformation"
Quarterly Journal of Economics, Vol. 133, N. 4 (November 2018): pp. 2037–2096
Original article (open access): [QJE website]
Latest draft (October 2017): [NBER WP]
Previous draft (November 2016): [CEPR WP] or [BEHL WP]
Abstract: Using novel microdata, we document an unintended, first-order consequence of the Protestant Reformation: a massive reallocation of resources from religious to secular purposes. To understand this process, we propose a conceptual framework in which the introduction of religious competition shifts political markets where religious authorities provide legitimacy to rulers in exchange for control over resources. Consistent with our framework, religious competition changed the balance of power between secular and religious elites: secular authorities acquired enormous amounts of wealth from monasteries closed during the Reformation, particularly in Protestant regions. This transfer of resources had important consequences. First, it shifted the allocation of upper-tail human capital. Graduates of Protestant universities increasingly took secular, especially administrative, occupations. Protestant university students increasingly studied secular subjects, especially degrees that prepared students for public sector jobs, rather than church sector-specific theology. Second, it affected the sectoral composition of fixed investment. Particularly in Protestant regions, new construction shifted from religious toward secular purposes, especially the building of palaces and administrative buildings, which reflected the increased wealth and power of secular lords. Reallocation was not driven by preexisting economic or cultural differences. Our findings indicate that the Reformation played an important causal role in the secularization of the West.
Previous draft (April 2014): [CESifo WP] or [NBER WP]
Media Coverage: [Cass Sunstein on BloombergView] [Deutsche Welle Chinese Net] [Foreign Policy]
Abstract: We study the causal effect of school curricula on students' stated beliefs and attitudes. We exploit a major textbook reform in China that was rolled out between 2004 and 2010 with the explicit intention of shaping youths' ideology. To measure its effect, we present evidence from a novel survey we conducted among 2000 students at Peking University. The sharp, staggered introduction of the new curriculum across provinces allows us to identify the effects of the new educational content in a generalized difference in differences framework. We examine government documents articulating desired consequences of the reform, and identify changes in textbook content and college entrance exams that reflect the government's aims. These changes were often effective: study under the new curriculum is robustly associated with changed views on political participation and democracy in China, increased trust in government officials, and a more skeptical view of free markets.
Leonardo Bursztyn, Davide Cantoni
"A Tear in the Iron Curtain: The Impact of Western Television on Consumption Behavior"
Review of Economics and Statistics, Vol. 91, N. 1 (March 2016): pp. 25–41
Original article: [REStat website]
Latest draft (August 2012): [CEPR WP] or [Munich Econ WP]
Media Coverage: [Handelsblatt] [Die Zeit] [Radio Bayern2] [Boston Globe]
Abstract: This paper examines the impact of exposure to foreign media on the economic behavior of agents in a totalitarian regime. We study private consumption choices focusing on former East Germany, where differential access to Western television was determined by geographic features. Using data collected after the transition to a market economy, we find no evidence of a significant impact of previous exposure to Western television on aggregate consumption levels. However, exposure to Western broadcasts affects the composition of consumption, biasing choices in favor of categories of goods with high intensity of pre-reunification advertisement. The effects vanish by 1998.
"The Economic Effects of the Protestant Reformation: Testing the Weber Hypothesis in the German Lands"
Journal of the European Economic Association, Vol. 13, N. 4 (August 2015): pp. 561–598
Original article: [JEEA website]
Final draft (May 2014): [pdf]
Supplementary Appendix: [pdf]
Previous draft (March 2013): [Munich Econ WP]
Previous draft (December 2010): [UPF Econ WP]
Media Coverage: [Marginal Revolution] [Il Sole 24 Ore] [El País] [El País (2)]
Abstract: Following Max Weber, many theories have hypothesized that Protestantism should have favored economic development. With its religious heterogeneity, the Holy Roman Empire presents an ideal testing ground for this hypothesis. Using population figures of 272 cities in the years 1300–1900, I find no effects of Protestantism on economic growth. The finding is precisely estimated, robust to the inclusion of various controls, and does not depend on data selection or small sample size. Denominational differences in fertility behavior and literacy are unlikely to be major confounding factors. Protestantism has no effect when interacted with other likely determinants of economic development. Instrumental variables estimates, considering the potential endogeneity of religious choice, are similar to the OLS results.
Davide Cantoni, Noam Yuchtman "Medieval Universities, Legal Institutions, and the Commercial Revolution"
Quarterly Journal of Economics, Vol. 129, N. 2 (May 2014): pp. 823–887
Original article: [QJE website]
Supplementary Appendix: [pdf]
Final draft (October 2013): [CESifo WP]
Previous draft (March 2012): [NBER WP] or [Munich Econ WP]
Media Coverage: [The Atlantic]
Abstract: We present new data documenting medieval Europe's "Commercial Revolution" using information on the establishment of markets in Germany. We use these data to test whether medieval universities played a causal role in expanding economic activity, examining the foundation of Germany's first universities after 1386 following the Papal Schism. We find that the trend rate of market establishment breaks upward in 1386 and that this break is greatest where the distance to a university shrank most. There is no differential pre-1386 trend associated with the reduction in distance to a university, and there is no break in trend in 1386 where university proximity did not change. These results are robust to estimating a variety of specifications that address concerns about the endogeneity of university location. Universities provided training in newly-rediscovered Roman and canon law; students with legal training served in positions that reduced the uncertainty of trade in the Middle Ages. We argue that training in the law, and the consequent development of legal and administrative institutions, was an important channel linking universities and greater economic activity in medieval Germany.
Davide Cantoni, Noam Yuchtman "The Political Economy of Educational Content and Development: Lessons from History"
Journal of Development Economics, Vol. 104 (September 2013): pp. 233–244
Original article: [JDE website]
Final draft (April 2013): [CESifo WP] or [BEHL WP]
Previous title: "Educational Content, Educational Institutions and Economic Development: Lessons from History"
Previous draft (November 2011): [Munich Econ WP]
Abstract: Beyond years of schooling, educational content can play an important role in the process of economic development. Individuals’ choices of educational content are often shaped by the political economy of government policies that determine the incentives to acquire various skills. We first present a model in which differences in human capital investments emerge as an equilibrium outcome of private decisions and government policy choices. We then illustrate these dynamics in two historical circumstances. In medieval Europe, states and the Church found individuals trained in Roman law valuable, and eventually supported productive investments in this new form of human capital. In late 19th-century China, elites were threatened by the introduction of Western science and engineering and continued to select civil servants—who enjoyed substantial rents—based on their knowledge of the Confucian classics; as a result, investments in productive, modern human capital were not made.
"Adopting a New Religion: The Case of Protestantism in 16th Century Germany"
Economic Journal, Vol. 122, N. 560 (May 2012): pp. 502–531
Original article: [EJ website]
Final draft (August 2011): [pdf]
Previous draft (Barcelona GSE working paper, April 2011): [RePEc page]
Media Coverage: [RES Media Briefing]
Abstract: Using a rich dataset of territories and cities of the Holy Roman Empire in the 16th century, this paper investigates the determinants of adoption and diffusion of Protestantism as a state religion. A territory's distance to Wittenberg, the city where Martin Luther taught, is a major determinant of adoption. This finding is consistent with a theory of strategic neighbourhood interactions: in an uncertain legal context, introducing the Reformation was a risky enterprise for territorial lords, and had higher prospects of success if powerful neighbouring states committed to the new faith first. The predictions of this theory are then compared to the actual patterns of expansion of Protestantism using a panel dataset featuring the dates of introduction of the Reformation.
Online data appendix, Replication materials: [AEA web page]
Previous draft (NBER WP 14831, March 2009): [RePEc page]
Media Coverage: [Handelsblatt] [Frankfurter Allg. Sonntagszeitung]
Abstract: The French Revolution had a momentous impact on neighboring countries. It removed the legal and economic barriers protecting oligarchies, established the principle of equality before the law, and prepared economies for the new industrial opportunities of the second half of the 19th century. We present within-Germany evidence on the long-run implications of these institutional reforms. Occupied areas appear to have experienced more rapid urbanization growth, especially after 1850. A two-stage least squares strategy provides evidence consistent with the hypothesis that the reforms instigated by the French had a positive impact on growth.
"It is too soon to say." (Zhou Enlai, asked for his assessment of the 1789 French Revolution)
Work in Progress
"Historical Contingencies, Econometric Problems: The Analysis of Natural Experiments in Economic History" (with Noam Yuchtman)
"Territorial Roots of National Identity" (with Cathrin Mohr, Matthias Weigand)
"Measuring Redistributional Preferences in East Asia" (with Vinci Y.C. Chow, David Y. Yang, Noam Yuchtman, and Y. Jane Zhang)
"Beliefs, Attitudes and Preferences of the Chinese Political Elites" (with Yuyu Chen, David Y. Yang, Noam Yuchtman, Y. Jane Zhang, David Zweig)
"Urbanization in Europe: Regional Variations, 1700–1900"
Other research (Book chapters)
Davide Cantoni, Noam Yuchtman "Historical Natural Experiments: Bridging Economics and Economic History"
In: Alberto Bisin and Giovanni Federico (eds.), Handbook of Historical Economics, Academic Press 2021.
Publisher site: [link]
Final draft (January 2020): [pdf]
Abstract: The analysis of historical natural experiments has profoundly impacted economics research across fields. In this chapter we trace the development and increasing application of the methodology, both from the perspective of economic historians and from the perspective of economists in other subdisciplines. We argue that the historical natural experiment represents a methodological bridge between economic history and other fields: historians are able to use the cutting edge identification strategies emphasized by applied microeconomists; economists across subfields are able to scour history for useful identifying variation; development and growth economists are able to trace the historical roots of contemporary outcomes, and to identify the ultimate causes of economic growth. Differences in fields suggest differences in scholars' aims of studying historical natural experiments. We propose a taxonomy of three primary motives that reflect priorities in different fields: historians aim to understand causal processes within specific settings. Economists across fields aim to identify "clean" historical events (in whatever context) to test hypotheses of theoretical interest or estimate causal parameters. And, growth and development economists aim to identify past variation that can be causally linked to contemporary outcomes of interest. We summarize important contributions made by research in each category. Finally, we close with a brief discussion of challenges facing each category of work.
Davide Cantoni, Felix Hagemeister, Mark Westcott "Voting for the far right in Germany"
In: Dalia Marin (ed.), Explaining Germany's Exceptional Recovery, CEPR Press (VoxEU.org Books) 2018.
Daron Acemoglu, Davide Cantoni, Simon Johnson, and James A. Robinson "From Ancien Regime to Capitalism: The Spread of the French Revolution as a Natural Experiment"
In: Jared Diamond and James A. Robinson (eds.), Natural Experiments of History, Harvard University Press 2010.
Publisher site: [link]
Final draft: [pdf]
Policy and other papers
"China und Hongkong am Scheideweg"
Perspektiven der Wirtschaftspolitik, Vol. 21, N. 2 (June 2020): pp. 185–196: [link]
Davide Cantoni, Jeremiah Dittmar, Noam Yuchtman The religious roots of the secular West: The Protestant Reformation and the allocation of resources in Europe voxEU column (October 2017): [link]