Institutional Persistence in Eastern Europe: Economic and Political Legacies of Empires and Communism

This dissertation seeks to advance our understanding of the roles that institutions play in economic development. How do institutions evolve? What mechanisms are responsible for their persistence? What effects do they have on economic development?

I address these questions using historical and contemporary data from Eastern Europe and Russia. This area is relatively understudied by development economists. It also has a very interesting history. For one thing, for several centuries it was divided between different empires. For another, it experienced wars and socialism in the 20th century. I use some of these exogenous shocks as quasi-natural social experiments to study the institutional transformations and its effects on economic development both in the short and long run.

This first chapter explores whether economic, social, and political institutions vary in their resistance to policies designed to remove them. The empirical context for the analysis is Romania from 1690 to the 2000s. Romania represents an excellent laboratory for studying the persistence of different types of historical institutional legacies. In the 18th and 19th centuries, Romania was split between the Habsburg and Ottoman Empires, where political and economic institutions differed. The Habsburgs imposed less extractive institutions relative to the Ottomans: stronger rule of law, a more stable and predictable state, a more developed civil society, and less corruption. In the 20th century, the Romanian Communist regime tried deliberately to homogenize the country along all relevant dimensions. It was only partially successful. Using a regression discontinuity design, I document the persistence of economic outcomes, social capital, and political attitudes. First, I document remarkable convergence in urbanization, education, unemployment, and income between the two former empires. Second, regarding social capital, no significant differences in organizational membership, trust in bureaucracy, and corruption persist today. Finally, even though the Communists tried to change all political attitudes, significant discontinuities exist in current voting behavior at the former Habsburg-Ottoman border. Using data from the parliamentary elections of 1996-2008, I find that former Habsburg rule decreases by around 6 percentage points the vote share of the major post-Communist left party and increases by around 2 and 5 percentage points the vote shares of the main anti-Communist and liberal parties, respectively.

The second chapter investigates the effects of Stalin’s mass deportations on distrust in central authority. Four deported ethnic groups were not rehabilitated after Stalin’s death; they remained in permanent exile until the disintegration of the Soviet Union. This allows one to distinguish between the effects of the groups that returned to their homelands and those of the groups that were not allowed to return. Using regional data from the 1991 referendum on the future of the Soviet Union, I find that deportations have a negative interim effect on trust in central authority in both the regions of destination and those of origin. The effect is stronger for ethnic groups that remained in permanent exile in the destination regions. Using data from the Life in Transition Survey, the chapter also documents a long-term effect of deportations in the destination regions.

The third chapter studies the short-term effect of Russian colonization of Central Asia on economic development. I use data on the regions of origin of Russian settlers and push factors to construct an instrument for Russian migration to Central Asia. This instrument allows me to interpret the outcomes causally. The main finding is that the massive influx of Russians into the region during the 1897-1926 period had a significant positive effect on indigenous literacy. The effect is stronger for men and in rural areas. Evidently, interactions between natives and Russians through the paid labor market was an important mechanism of human capital transmission in the context of colonization.

The findings of these chapters provide additional evidence that history and institutions do matter for economic development. Moreover, the dissertation also illuminates the relative persistence of institutions. In particular, political and social capital legacies of institutions might outlast economic legacies. I find that most economic differences between the former empires in Romania have disappeared. By the same token, there are significant discontinuities in political outcomes. People in former Habsburg Romania provide greater support for liberalization, privatization, and market economy, whereas voters in Ottoman Romania vote more for redistribution and government control over the economy.

In the former Soviet Union, Stalin’s deportations during World War II have a long-term negative effect on social capital. Today’s residents of the destination regions of deportations show significantly lower levels of trust in central authority. This is despite the fact that the Communist regime tried to eliminate any source of opposition and used propaganda to homogenize people’s political and social attitudes towards the authorities. In Central Asia, the influx of Russian settlers had a positive short-term effect on human capital of indigenous population by the 1920s, which also might have persisted over time.

From a development perspective, these findings stress the importance of institutions for future paths of development. Even if past institutional differences are not apparent for a certain period of time, as was the case with the former Communist countries, they can polarize society later on, hampering economic development in the long run. Different institutions in the past, which do not exist anymore, can thus contribute to current political instability and animosity.

Survival of a Perverse Nation: Sexuality and Kinship in Post-Soviet Armenia

Survival of a Perverse Nation traces the ways in which contemporary Armenian anxieties are congealing into the figure of the “homosexual.” As in other post-Soviet republics, homosexuality has increasingly become defined as the crisis of the times, and is understood by many as a destructive force linked to European encroachment. In Armenia, a growing right-wing nationalist movement since 2012 has been targeting LGBT and feminist activists. I suggest that this movement has arisen out of Armenia’s concerns regarding proper social and biological reproduction in the face of high rates of emigration of especially men in search of work. Many in the country blame this emigration on a post-Soviet oligarchy, with close ties to the government. This oligarchy, having quickly and massively privatized and liquidated industry and land during the war over the region of Nagorno-Karabagh (1990-1994) with Azerbaijan, created widespread un(der)employment. A national narrative attributing the nation’s survival of the 1915 Genocide and dispersion of its populations to strong morality preserved by institutions such as the Church and the family has now, in the post-Soviet era, ruptured into one of moral “perversion.” This dissertation is based on 15 months of ethnographic research, during which I participated in the work of two local non-governmental organizations: Public Information and Need for Knowledge, an LGBT rights organization and Women’s Resource Center, a feminist organization. I also conducted interviews with 150 households across Yerevan, the capital city, and did in-depth interviews with other activists, right-wing nationalists and journalists. Through psychoanalytic frameworks, as well as studies of kinship, I show how sovereignty – the longed for dream for Armenians over the last century – is felt to have failed because of the moral corruption of the illegitimate figures that fill Armenian seats of authority. I, thus, examine the ways in which a missing father of the household is discursively linked to the lack of strong leadership by a corrupt government, producing a prevalent feeling of moral disintegration that nationalists displace onto the “homosexual.”

Reckoning With Apartheid: The Conundrum of Working Through the Past, An Introduction

From April 26-29, 1994, South Africa held its first universal, democratic elections. Witnessed by the world, South Africans of all races waited patiently in line to cast their ballots, signaling the official and symbolic birth of the “new” South Africa. The subsequent years, marked initially with euphoric hopes for racial healing enabled by institutional processes such as the Truth and Reconciliation Commission (TRC), have instead, most recently, inspired deep concern about epidemic levels of HIV/AIDS, violent crime, state corruption, and unbridled market reforms directed at everything from property to bodies to babies. Now, seemingly beleaguered state officials deploy the mantra “TINA” (There Is No Alternative [to neoliberal development]) to fend off criticism of growing income and wealth disparities. To coincide, more or less, with the anniversary of 1994—less to commemorate than to signal something about the trajectory of the past twenty years—we are proposing an interdisciplinary, special theme section of Comparative Studies in South Asia, Africa, and the Middle East (CSSAAME) entitled “The Haunted Present: Reckoning After Apartheid” (tentative title). The special theme section is framed around questions of reckoning in the double sense of both a moral and practical accounting for historical injury alongside the challenges and failures of the no-longer “new” South Africa. Against accounts depicting the liberation era as non-violent and peaceable, more nuanced analysis we argue suggests not only that South Africa’s “revolution” was marked by both collective and individual violence—on the part of the state and the liberation movements—but that reckoning with the present demands of scholars, the media, and cultural commentators that they begin to grapple more fully with the dimensions and different figurations of South Africa’s violent colonial history. Indeed, violence and reckoning appear as two central forces in contemporary South African political, economic, and social life. In response, we are driven to pose the following questions: In the post-apartheid period, what forms of (individual, structural) violence have come to bear on South African life? How does this violence reckon with apartheid and its legacies? Does it in fact reckon with the past? How can we or should we think about violence as a response to the (failed?) reckoning of state initiatives like the TRC? What has enabled or enables aesthetic forms—literature, photography, plastic arts, and other modes of expressive culture—to respond to the difficulties of South Africa’s ongoing transition? What, in fact, would a practice or ethic of reckoning defined in the following way look like? ˈrekəniNG/ noun: • the action or process of calculating or estimating something: last year was not, by any reckoning, a particularly good one; the system of time reckoning in Babylon • a person’s view, opinion, or judgment: by ancient reckoning, bacteria are plants • archaic, a bill or account, or its settlement • the avenging or punishing of past mistakes or misdeeds: the fear of being brought to reckoning there will be a terrible reckoning (Oxford English Dictionary) Looking back on the period, just before 1994, is sobering indeed. At the time, many saw in the energies and courage of those fighting for liberation the possibilities of a post-racial, post-conflict society. Yet as much as the new was ushered in, old apartheid forms lingered. Recalling Nadine Gordimer’s invocation of Gramsci’s “morbid symptoms” more and more it seems “the old is dying and the new cannot be born” (Gramsci cited in Gordimer 1982). And even as the new began to emerge other forces—both internal and external to South Africa—redefined the conditions for transformation. The so-called “new” South Africa, as Jennifer Wenzel has argued, was really more than anything “the changing face of old oppressions” (Wenzel 2009:159). The implications for our special theme section of CSSAAME are many. We begin by exploring the gender, race, and class dimensions of contemporary South African life by way of its literatures, histories, and politics, its reversion to custom, the claims of ancestors on the living, in brief, the various cultural expressive modes in which contemporary South Africa reckons with its past and in so doing accounts, day by day, for the ways in which the present can be lived, pragmatically. This moves us some distance from the exercise in “truth and reconciliation” of the earlier post-transition years to consider more fully the nature of post-conflict, the suturing of old enmities in the present, and the ways of resolving those lingering suspicions both ordinary and the stuff of the dark night of the soul (Nelson 2009:xv).

Reckoning With Apartheid: The Conundrum of Working Through the Past

From April 26-29, 1994, South Africa held its first universal, democratic elections. Witnessed by the world, South Africans of all races waited patiently in line to cast their ballots, signaling the official and symbolic birth of the “new” South Africa. The subsequent years, marked initially with euphoric hopes for racial healing enabled by institutional processes such as the Truth and Reconciliation Commission (TRC), have instead, most recently, inspired deep concern about epidemic levels of HIV/AIDS, violent crime, state corruption, and unbridled market reforms directed at everything from property to bodies to babies. Now, seemingly beleaguered state officials deploy the mantra “TINA” (There Is No Alternative [to neoliberal development]) to fend off criticism of growing income and wealth disparities. To coincide, more or less, with the anniversary of 1994—less to commemorate than to signal something about the trajectory of the past twenty years—we are proposing an interdisciplinary, special theme section of Comparative Studies in South Asia, Africa, and the Middle East (CSSAAME) entitled “The Haunted Present: Reckoning After Apartheid” (tentative title). The special theme section is framed around questions of reckoning in the double sense of both a moral and practical accounting for historical injury alongside the challenges and failures of the no-longer “new” South Africa. Against accounts depicting the liberation era as non-violent and peaceable, more nuanced analysis we argue suggests not only that South Africa’s “revolution” was marked by both collective and individual violence—on the part of the state and the liberation movements—but that reckoning with the present demands of scholars, the media, and cultural commentators that they begin to grapple more fully with the dimensions and different figurations of South Africa’s violent colonial history. Indeed, violence and reckoning appear as two central forces in contemporary South African political, economic, and social life. In response, we are driven to pose the following questions: In the post-apartheid period, what forms of (individual, structural) violence have come to bear on South African life? How does this violence reckon with apartheid and its legacies? Does it in fact reckon with the past? How can we or should we think about violence as a response to the (failed?) reckoning of state initiatives like the TRC? What has enabled or enables aesthetic forms—literature, photography, plastic arts, and other modes of expressive culture—to respond to the difficulties of South Africa’s ongoing transition? What, in fact, would a practice or ethic of reckoning defined in the following way look like? ˈrekəniNG/ noun: • the action or process of calculating or estimating something: last year was not, by any reckoning, a particularly good one; the system of time reckoning in Babylon • a person’s view, opinion, or judgment: by ancient reckoning, bacteria are plants • archaic, a bill or account, or its settlement • the avenging or punishing of past mistakes or misdeeds: the fear of being brought to reckoning there will be a terrible reckoning (Oxford English Dictionary) Looking back on the period, just before 1994, is sobering indeed. At the time, many saw in the energies and courage of those fighting for liberation the possibilities of a post-racial, post-conflict society. Yet as much as the new was ushered in, old apartheid forms lingered. Recalling Nadine Gordimer’s invocation of Gramsci’s “morbid symptoms” more and more it seems “the old is dying and the new cannot be born” (Gramsci cited in Gordimer 1982). And even as the new began to emerge other forces—both internal and external to South Africa—redefined the conditions for transformation. The so-called “new” South Africa, as Jennifer Wenzel has argued, was really more than anything “the changing face of old oppressions” (Wenzel 2009:159). The implications for our special theme section of CSSAAME are many. We begin by exploring the gender, race, and class dimensions of contemporary South African life by way of its literatures, histories, and politics, its reversion to custom, the claims of ancestors on the living, in brief, the various cultural expressive modes in which contemporary South Africa reckons with its past and in so doing accounts, day by day, for the ways in which the present can be lived, pragmatically. This moves us some distance from the exercise in “truth and reconciliation” of the earlier post-transition years to consider more fully the nature of post-conflict, the suturing of old enmities in the present, and the ways of resolving those lingering suspicions both ordinary and the stuff of the dark night of the soul (Nelson 2009:xv).