Working Paper: CEPR ID: DP16447
Authors: Jeremiah Dittmar; Luis Bosshart
Abstract: We document how the Black Death activated political competition and led to economic divergence within Europe. Before the pandemic, economic development was similar in Eastern and Western German cities despite greater political fragmentation in the West. The pandemic led to a divergence that reflected regional differences in politics. After the pandemic, construction and manufacturing fell by 1/3 in the East relative to underlying trends and the Western path. Politics institutionalizing local self-government advanced in the West, but not in the East. This divergence is observed across otherwise similar cities along historic borders and foreshadows a subsequent divergence in agriculture.
Keywords: institutions; political economy; cities; growth
JEL Codes: N13; N14; N60; N93; O10; O18; O40; O43; P48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Black Death (N94) | political competition (D72) |
| political competition (D72) | economic divergence between eastern and western Germany (P27) |
| Black Death (N94) | economic divergence between eastern and western Germany (P27) |
| political fragmentation (F12) | economic growth in eastern cities (R11) |
| political fragmentation (F12) | bargaining power of cities (R12) |
| bargaining power of cities (R12) | economic growth (O49) |
| economic divergence (F62) | changes in agriculture (Q15) |