Matteo Cervellati

Human capital formation, life expectancy, and the process of development

We provide a unified theory of the transition in income, life expectancy, education, and population size from a nondeveloped environment to sustained growth. Individuals optimally trade off the time cost of education with its lifetime returns. Initially, low longevity implies a prohibitive cost for human capital formation for most individuals. A positive feedback loop between human capital and increasing longevity, triggered by endogenous skill-biased technological progress, eventually provides sufficient returns for widespread education. The transition is not based on scale effects and induces population growth despite unchanged fertility. A simulation illustrates that the dynamics fit historical data patterns.(This abstract was borrowed from another version of this item.)

'Thou Shalt Not Covet ...': Prohibitions, Temptation and Moral Values

We propose a theory studying temptation in presence of both externally and internally sanctioned prohibitions. Moral values that (internally) sanction prohibited actions and their desire may increase utility by reducing self-control costs, thereby serving as partial commitment devices. We apply the model to crime and study the conditions under which agents would optimally adhere to moral values of honesty. Incentives to be moral are non- monotonic in the crime premium. Larger external punishments increase temptation and demand for morality, so that external and internal sanctions are complements. The model helps rationalizing stylized facts that proved difficult to explain with available theories.

Hobbes to Rousseau: Inequality, Institutions, and Development

We analyze the endogenous evolution of economic and political institutions and the interdependencies with the process of economic development. Favorable economic institutions ensure the appropriability of rents in form of a state of law. We study the conditions under which a state of law can be implemented under oligarchy, and when democratization is necessary. Inequality in endowments and incomes prolongs the absence of good institutions and delays democratization. Conversely, institutions shape the income distribution. Simulations illustrate how inequality affects the development process and may lead to overtaking and divergence. The implications are in line with historical and empirical evidence.

The Economic and Demographic Transition, Mortality, and Comparative Development

We propose a unified growth theory to investigate the mechanics generating the economic and demographic transition, and the role of mortality differences for comparative development. The framework can replicate the quantitative patterns in historical time series data and in contemporaneous cross-country panel data, including the bi-modal distribution of the endogenous variables across countries. The results suggest that differences in extrinsic mortality might explain a substantial part of the observed differences in the timing of the take-off across countries and the worldwide density distribution of the main variables of interest.

Are All Democracies Equally Good? The Role of Interactions Between Political Environment and Inequality for Rule of Law

Using cross-country data, we find evidence for a significant interaction effect between democracy and equality in determining the quality of growth-promoting institutions like rule of law. Democracy is associated with better rule of law when inequality is lower.

Civil Conflict, Democratization, and Growth: Violent Democratization as Critical Juncture ∗

In this paper, we provide an empirical investigation of the interaction between violent conflicts, democratization, and growth in the “third wave” of democratization. The effect of democratization is weakened when taking into account the incidence of civil conflict. The results show that the growth effect of democratization is heterogeneous and depends on the democratization scenario. Peaceful transitions to democracy have a significant positive effect on growth that is even larger than reported previously in the literature, whereas violent transitions have no, or even negative, growth effects.

Pathogens, Weather Shocks and Civil Conflicts

This article documents a statistically strong and quantitatively relevant effect of high exposure to infectious diseases on the risk of civil conflicts. The analysis exploits data on the presence and endemicity of multi-host vector-transmitted pathogens in a country, which is closely related to geo-climatic conditions due to the specific features of these pathogens. Exploiting within-country variation over time shows that this effect of pathogen exposure is significantly amplified by weather shocks. The results indicate health shocks and the outbreak of epidemics as a potential channel, while we find no evidence that the effect works through alternative channels like income, population dynamics, or institutions.