Long-Lasting Social Capital and its Impact on Economic Development: The Legacy of the Commons

IEB Working Paper N. 2018/16

64 Pages Posted: 7 Nov 2018

See all articles by Daniel Montolio

Daniel Montolio

University of Barcelona - Faculty of Economic Science and Business Studies

Ana Tur-Prats

University of California, Merced - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 15, 2018

Abstract

This paper analyzes the historical determinants and long-term persistence of social capital, as well as its effect on economic development, by looking at the legacy of the commons in a Spanish region. In medieval times, common goods were granted to townships and were managed collectively by local citizens. This enabled the establishment of institutions for collective action and self-government. Common goods persisted until the second half of the nineteenth century. We argue that the experience of cooperation among villagers, repeated over the centuries, increased the social capital in each local community. In 1845, a law forced small villages to merge with others, a fact which generated exogenous variation in the number of mergers (i.e., cooperative networks) that each modern municipality was required to have. We exploit this change in an IV and RD setting and find that current municipalities formed by a greater number of old townships have a denser network of associations. We also find that higher social capital is associated with more economic development.

Keywords: Collective action, self-government, long-term persistence, common goods

JEL Classification: N90, P48, Z10, H49

Suggested Citation

Montolio, Daniel and Tur-Prats, Ana, Long-Lasting Social Capital and its Impact on Economic Development: The Legacy of the Commons (October 15, 2018). IEB Working Paper N. 2018/16, Available at SSRN: https://ssrn.com/abstract=3266640 or http://dx.doi.org/10.2139/ssrn.3266640

Daniel Montolio (Contact Author)

University of Barcelona - Faculty of Economic Science and Business Studies ( email )

Av. Diagonal, 690
Torre 4 Planta 2
Barcelona, 08034
Spain

Ana Tur-Prats

University of California, Merced - Department of Economics ( email )

P.O. Box 2039
Merced, CA 95344
United States

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