Christian Dippel

Forced Coexistence and Economic Development: Evidence From Native American Reservations

Studying Native American reservations, and their historical formation, I find that their forced integration of autonomous polities into a system of shared governance had large negative long‐run consequences, even though the affected people were ethnically and linguistically homogenous. Reservations that combined multiple sub‐tribal bands when they were formed are 30% poorer today, even when conditioning on pre‐reservation political traditions. The results hold with tribe fixed effects, identifying only off within‐tribe variation across reservations. I also provide estimates from an instrumental variable strategy based on historical mining rushes that led to exogenously more centralized reservations. Data on the timing of economic divergence and on contemporary political conflict suggest that the primary mechanism runs from persistent social divisions through the quality of local governance to the local economic environment.

The Rents from Trade and Coercive Institutions: Removing the Sugar Coating

The 19th century collapse of world sugar prices should have depressed wages in the British West Indies sugar colonies. It did not. We explain this by showing how lower prices weakened the power of the white planter elite and thus led to an easing of the coercive institutions that depressed wages e.g., institutions that kept land out of the hands of peasants. Using unique data for 14 British West Indies sugar colonies from 1838 to 1913, we examine the impact of the collapse of sugar prices on wages and incarceration rates. We find that in colonies that were poorly suited for sugar cane cultivation (an exogenous colony characteristic), the planter elite declined in power and the institutions they created and supported became less coercive. As a result, wages rose by 20% and incarceration rates per capita were cut in half. In contrast, in colonies that were highly suited for sugar cane there was little change in the power of the planter elite --- as a result, institutions did not change, the market-based mechanisms of standard trade theory were salient, and wages fell by 24%. In short, movements in the terms of trade induced changes in coercive institutions, changes that are central for understanding how the terms of trade affects wages.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Groseclose and Snyder in finite legislatures

The Groseclose and Snyder (1996) model is one of the best-known models of vote buying in legislatures. Although the logic of the model is compelling, it is not clear that its key propositions, derived in a continuous set-up, hold in finite legislatures. This is an important issue because many real-world legislatures are small and should be modeled as finite in order to make predictions on coalition formation in them. This paper makes two contributions. The main one is to show with full generality that the key propositions in the Groseclose and Snyder model do carry through into finite legislatures. Secondly, it clarifies the role that parameter restrictions played in previous work on this question by Banks (2000) which was not fully general.

Forced Coexistence and Economic Development: Evidence from Native American Reservations

Studying Native American reservations, and their historical formation, I find that their forced integration of autonomous polities into a system of shared governance had large negative long-run consequences, even though the affected people were ethnically and linguistically homogenous. Reservations that combined multiple sub-tribal bands when they were formed are 30% poorer today, even when conditioning on prereservation political traditions. The results hold with tribe fixed effects, identifying only off within-tribe variation across reservations. I also provide estimates from an instrumental variable strategy based on historical mining rushes that led to exogenously more centralized reservations. Data on the timing of economic divergence and on contemporary political conflict suggest that the primary mechanism runs from persistent social divisions through the quality of local governance to the local economic environment.