Still Divided: The Long-Run Effects of China’s Great Wall on Contemporary Ethnic Diversity and Economic Development

Abstract

This paper examines the persistent effects of China’s Great Wall, built in the Ming Dynasty (1368–1644), on contemporary regional ethnic diversity and economic development. Using rich township- and individual-level data combined with a spatial regression discontinuity strategy, we find that towns located north of the Great Wall have: (i) higher ethnic diversity, (ii) lower economic development levels measured by nighttime luminosity and households’ wealth, (iii) less public goods provision, and (iv) lower human capital stock with higher levels of education inequality. The paper highlights ethnic diversity inherited from historical frontiers as a deep-rooted cause of China’s huge regional disparities.

Keywords: The Great Wall of China, Ethnic Diversity, Economic Development, Public Goods Provision, Spatial Regression Discontinuity

JEL Classification: J15, O15, O17, O53, Z13