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.

Three Essays on the Effects of Donor Supplied Contraceptives on Fertility, Usage, and Attitudes

After the 2012 London Summit on Family Planning, there have been major strides in advancing the family planning agenda for low and middle-income countries worldwide. Much of the existing infrastructure and funding for family planning access is in the form of supplying free contraceptives to countries. While the average yearly value of donations since 2000 was over 170 million dollars for contraceptives procured for developing countries, an ongoing debate in the empirical literature is whether increases in contraceptive access and supply drive declines in fertility (UNFPA 2014).

This dissertation explores the fertility and behavioral effects of an increase in contraceptive supply donated to Zambia. Zambia, a high-fertility developing country, receives over 80 percent of its contraceptives from multilateral donors and aid agencies. Most contraceptives are donated and provided to women for free at government clinics (DELIVER 2015). I chose Zambia as a case study to measure the relationship between contraceptive supply and fertility because of two donor-driven events that led to an increase in both the quantity and frequency of contraceptives starting in 2008 (UNFPA 2014). Donations increased because donors and the Zambian government started a systematic method of forecasting contraceptive need on December 2007, and the Mexico City Policy was lifted in January 2009.

In Chapter 1, I investigate whether a large change in quantity and frequency of donated contraceptives affected fertility, using available data on contraceptive donations to Zambia, and birth records from the 2007 and 2013 Demographic and Health Surveys. I use a difference-in-difference framework to estimate the fertility effects of a supply chain improvement program that started in 2011, and was designed to ensure more regularity of contraceptive supply. The increase in total contraceptive supply after the Mexico City Policy was rescinded is associated with a 12 percent reduction in fertility relative to the before period, after controlling for demographic characteristics and time controls. There is evidence that a supply chain improvement program led to significant fertility declines for regions that received the program after the Mexico City Policy was rescinded.

In Chapter 2, I explore the effects of the large increase in donated contraceptives on modern contraceptive uptake. According to the 2007 and 2013 Demographic and Health Surveys, there was a dramatic increase in current use of injectables, implants, and IUDs. Simultaneously, declines occurred in usage of condoms, lactational amenorrhea method (LAM), and traditional methods. In this chapter, I estimate the effect of the increase in donations on uptake, composition of contraceptive usage, and usage of methods based on distance to contraceptive access points. The results show the post-2007 period is associated with an increase in usage of injectables and the pill among women living further away from access points.

In Chapter 3, I explore attitudes towards the contraceptive supply system, and identify areas for improvement, based on qualitative interviews with 14 experts and 61 Zambian users and non-users of contraceptives. The interviews uncover systemic barriers that prevent women from consistently accessing methods, and individual barriers that exacerbate the deficiencies in supply chain procedures. I find that 39 out of 61 women interviewed, both users and non-users, had personal experiences with stock out. The qualitative results suggest that the increase in contraceptives brought to the country after 2007 may have not contributed to as large of a decline in fertility because of bottlenecks in the supply chain, and problems in maintaining stock levels at clinics. I end the chapter with a series of four recommendations for improvements in the supply chain going forward, in light of recent commitments by the Zambian government during the 2012 London Summit on Family Planning.

The Effects of Brominated Flame Retardants on Thyroid Hormone Homeostasis in Human Placenta Tissues and Cell Culture

Polybrominated diphenyl ethers (PBDEs) are a class of brominated flame retardants (BFRs) that have been heavily used in consumer products such as furniture foams, plastics, and textiles since the mid-1970’s. BFRs are added to products in order to meet state flammability standards intended to increase indoor safety in the event of a fire. The three commercial PBDE mixtures, Penta-, Octa-, and DecaBDE, have all been banned in the United States, however, limited use of DecaBDE is still permitted. PBDEs were phased out of production and added to the Stockholm Convention due to concerns over their environmental persistence and toxicity. Human exposure to PBDEs occurs primarily through the inadvertent ingestion of contaminated house dust, as well as though dietary sources. Despite the phase-out and discontinued use of PBDEs, human exposure to this class of chemicals is likely to continue for decades due to the continued use of treated products and existing environmental reservoirs of PBDEs. Extensive research over the years has shown that PBDEs disrupt thyroid hormone (TH) levels and neurodevelopmental endpoints in rodent and fish models. Additionally, there is growing epidemiological evidence linking PBDE exposure in humans to altered TH homeostasis and neurodevelopmental impairments in children. Due to the importance of THs throughout gestation, there is a great need to understand the effects of BFRs on the developing fetus. Specifically, the placenta plays a critical role in the transport, metabolism, and delivery of THs to the fetal compartment during pregnancy and is a likely target for BFR bioaccumulation and endocrine disruption. The central hypothesis of this dissertation research is that BFRs disrupt the activity of TH sulfotransferase (SULT) enzymes, thereby altering TH concentrations in the placenta.

In the first aim of this dissertation research, the concentrations of PBDEs and 2,4,6-TBP were measured in a cohort of 102 placenta tissue samples from an ongoing pregnancy cohort in Durham, NC. Methods were developed for the extraction and analysis of the BFR analytes. It was found that 2,4,6-TBP was significantly correlated with all PBDE analytes, indicating that 2,4,6-TBP may share common product applications with PBDEs or that 2,4,6-TBP is a metabolite of PBDE compounds. Additionally, this was the first study to measure 2,4,6-TBP in human placenta tissues.

In the second aim of this dissertation research, the placenta tissue concentrations of THs, as well as the endogenous activity of deiodinase (DI) and TH SULT enzymes were quantified using the same cohort of 102 placenta tissue samples. Enzyme activity was detected in all samples and this was the first study to measure TH DI and SULT activity in human placenta tissues. Enzyme activities and TH concentrations were compared with BFR concentrations measured in Aim 1. There were few statistically significant associations observed for the combined data, however, upon stratifying the data set based on infant sex, additional significant associations were observed. For example, among males, those with the highest concentrations of BDE-99 in placenta had T3 levels 0.80 times those with the lowest concentration of BDE-99 (95% confidence interval (CI): 0.59, 1.07). Whereas females with the highest concentrations of BDE-99 in placenta had T3 levels 1.50 times those with the lowest concentration of BDE-99 (95% CI: 1.10, 2.04). Additionally, all BFR analyte concentrations were higher in the placenta of males versus females and they were significantly higher for 2,4,6-TBP and BDE-209. 3,3’-T2 SULT activity was significantly higher in female placenta tissues, while type 3 DI activity was significantly higher in male placenta tissues. This research is the first to show sex-specific differences in the bioaccumulation of BFRs in human placenta tissue, as well as differences in TH concentrations and endogenous DI and SULT activity. The underlying mechanisms of these observed sex differences warrant further investigation.

In the third aim of this dissertation research, the effects of BFRs were examined in a human choriocarcinoma placenta cell line, BeWo. Michaelis-Menten parameters and inhibition curves were calculated for 2,4,6-TBP, 3-OH BDE-47, and 6-OH BDE-47. 2,4,6-TBP was shown to be the most potent inhibitor of 3,3’-T2 SULT activity with a calculated IC50 value of 11.6 nM. It was also shown that 2,4,6-TBP and 3-OH BDE-47 exhibit mixed inhibition of 3,3’-T2 sulfation in BeWo cell homogenates. Next, a series of cell culture exposure experiments were performed using 1, 6, 12, and 24 hour exposure durations. Once again, 2,4,6-TBP was shown to be the most potent inhibitor of basal 3,3’-T2 SULT activity by significantly decreasing activity at the high and medium dose (1 M and 0.5 M, respectively) at all measured time points. Interestingly, BDE-99 was also shown to inhibit basal 3,3’-T2 SULT activity in BeWo cells following the 24 hour exposure, despite exhibiting no inhibitory effects in the BeWo cell homogenate experiments. This indicates that BDE-99 must act through a pathway other than direct enzyme inhibition. Following exposures, the TH concentrations in the cell culture growth media and mRNA expression of TH-related genes were also examined. There was no observed effect of BFR treatment on these endpoints. Future work should focus on determining the downstream biological effects of TH SULT disruption in placental cells, as well as the underlying mechanisms of action responsible for reductions in basal TH SULT activity following BFR exposure.

This was one of the first studies to measure BFRs in a cohort of placenta tissue samples from the United States and the first study to measure THs, DI activity, and SULT activity in human placenta tissues. This research provides a novel contribution to our growing understanding of the effects of BFRs on TH homeostasis within the human placenta, and provides further evidence for sex-specific differences within this important organ. Future research should continue to investigate the effects of environmental contaminants on TH homeostasis within the placenta, as this represents the most critical and vulnerable stage of human development.