Working Paper: NBER ID: w21932
Authors: Daron Acemoglu; Jacob Moscona; James A. Robinson
Abstract: Robert Gordon's The Rise and Fall of American Economic Growth provides a compelling interpretation of how technical change and innovation has radically changed the living standards of the citizens of the US in the past 150 years. Lying behind these changes are the institutions which have allowed the country to harness its human potential. In this paper we conduct an empirical investigation of the impact of one key set of institutions, the capacity of the US state as proxied by the presence of post offices in a county, on innovation. We show that between 1804 and 1899, the time when the US became the world technological leader, there is a strong association between the presence and number of post offices in a county and patenting activity, and it appears that it is the opening of postal offices that leads to surges in patenting activity, not the other way around. Our evidence suggests that part of the yet untold story of US technological exceptionalism is the way in which the US created an immensely capable and effective state.
Keywords: state capacity; innovation; patenting; 19th century; post offices
JEL Codes: D70; N11; N41; O3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| post offices facilitate flow of information (L87) | patenting activity (O34) |
| number of post offices (L87) | patenting activity (O34) |
| lagged number of post offices (L87) | patenting activity (O34) |
| establishment of post offices (L87) | increases in patenting activity (O39) |