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.

Institutional Persistence and Change in England's Common Law: 1700-1865

Institutions are widely regarded as important, even ultimate drivers of economic growth and performance. A recent mainstream of institutional economics has concentrated on the effect of persisting, often imprecisely measured institutions and on cataclysmic events as agents of noteworthy institutional change. As a consequence, institutional change without large-scale shocks has received little attention. In this dissertation I apply a complementary, quantitative-descriptive approach that relies on measures of actually enforced institutions to study institutional persistence and change over a long time period that is undisturbed by the typically studied cataclysmic events. By placing institutional change into the center of attention one can recognize different speeds of institutional innovation and the continuous coexistence of institutional persistence and change. Specifically, I combine text mining procedures, network analysis techniques and statistical approaches to study persistence and change in England’s common law over the Industrial Revolution (1700-1865). Based on the doctrine of precedent - a peculiarity of common law systems - I construct and analyze the apparently first citation network that reflects lawmaking in England. Most strikingly, I find large-scale change in the making of English common law around the turn of the 19th century - a period free from the typically studied cataclysmic events. Within a few decades a legal innovation process with low depreciation rates (1 to 2 percent) and strong past-persistence transitioned to a present-focused innovation process with significantly higher depreciation rates (4 to 6 percent) and weak past-persistence. Comparison with U.S. Supreme Court data reveals a similar U.S. transition towards the end of the 19th century. The English and U.S. transitions appear to have unfolded in a very specific manner: a new body of law arose during the transitions and developed in a self-referential manner while the existing body of law lost influence, but remained prominent. Additional findings suggest that Parliament doubled its influence on the making of case law within the first decades after the Glorious Revolution and that England’s legal rules manifested a high degree of long-term persistence. The latter allows for the possibility that the often-noted persistence of institutional outcomes derives from the actual persistence of institutions.

Homogeneous middles vs. heterogeneous tails, and the end of the ‘Inverted-U’: the share of the rich is what it’s all about

This paper examines the current global scene of distributional disparities within-nations. There are six main conclusions. First, about 80 per cent of the world’s population now live in regions whose median country has a Gini not far from 40. Second, as outliers are now only located among middle-income and rich countries, the ‘upwards’ side of the ‘Inverted-U’ between inequality and income per capita has evaporated (and with it the statistical support there was for the hypothesis that posits that, for whatever reason, ‘things have to get worse before they can get better’). Third, among middle-income countries Latin America and mineral-rich Southern Africa are uniquely unequal, while Eastern Europe follows a distributional path similar to the Nordic countries. Fourth, among rich countries there is a large (and growing) distributional diversity. Fifth, within a global trend of rising inequality, there are two opposite forces at work. One is ‘centrifugal’, and leads to an increased diversity in the shares appropriated by the top 10 and bottom 40 per cent. The other is ‘centripetal’, and leads to a growing uniformity in the income-share appropriated by deciles 5 to 9. Therefore, half of the world’s population (the middle and upper-middle classes) have acquired strong ‘property rights’ over half of their respective national incomes; the other half, however, is increasingly up for grabs between the very rich and the poor. And sixth, Globalisation is thus creating a distributional scenario in which what really matters is the income-share of the rich — because the rest ‘follows’ (middle classes able to defend their shares, and workers with ever more precarious jobs in ever more ‘flexible’ labour markets). Therefore, anybody attempting to understand the within-nations disparity of inequality should always be reminded of this basic distributional fact following the example of Clinton’s campaign strategist: by sticking a note on their notice-boards saying “It’s the share of the rich, stupid”.

Personal and institutional factors: Relationship to self-efficacy of persistence to the senior year in college among self-identified Black undergraduate students in a Hispanic serving institution

While undergraduate enrollment of all racial groups in United States higher education institutions has increased, 6-year graduation rates of Blacks (39%) remain low compared to other races; Asians (69%), Whites (62%), and Hispanics (50%; NCES, 2010). Women's graduation rate is higher than men's; 58% compared to men's at 53% in public institutions (IPEDS, 2011). Retention literature does not address the perceptions of Black ethnic groups' experiences in college, particularly in Hispanic serving institutions. Informed by Tinto's (1975, 1987, 1993) student academic and social integration model, Guiffrida's (2003, 2004, 2005, 2006) model of relationships while at college, and ex-post facto research design, the study investigated personal and institutional factors that relate to Black students' self-efficacy and persistence to the senior year in college. Data about Black ethnic undergraduate seniors' (N = 236) academic and social experiences in college were collected using the Student Institutional Integration Survey (SIIS), an online questionnaire. Descriptive statistics were used to collect background information about the sample, correlation was calculated to indicate the degree of relationship between the variables, and multiple linear regressions were used to identify variables that are predictors of self-efficacy of persistence. Independent samples t-test and analyses of variance were computed to determine whether differences in perceptions of personal and institutional factors that relate to self-efficacy of persistence to the senior year in college could be identified between gender and ethnicity. Frequency was summarized to identify themes of participants' primary motivation for finishing undergraduate degree programs. These themes were: (a) self-pride/personal goal, (b) professional aspiration/career (c) motivation to support family, (d) desire to have financial independence/better job, (e) to serve community, (f) opportunity to go to college, (g) being first-generation college student, and (h) prove to family the value of higher education. The research findings support the tenets of academic and social integration theories which suggest that students' interaction with peer and faculty, relationships with family and friends, and involvement in institutional activities and organizations influence their persistence in college. Implications based on the findings affect institutional policy, curriculum, and program improvements that relate to Black undergraduate students' academic and social support.

Personal and Institutional Factors: Relationship to Self-Efficacy of Persistence to the Senior Year in College among Self-Identified Black Undergraduate Students in a Hispanic Serving Institution

While undergraduate enrollment of all racial groups in United States higher education institutions has increased, 6-year graduation rates of Blacks (39%) remain low compared to other races; Asians (69%), Whites (62%), and Hispanics (50%; NCES, 2010). Women’s graduation rate is higher than men’s; 58% compared to men’s at 53% in public institutions (IPEDS, 2011). Retention literature does not address the perceptions of Black ethnic groups’ experiences in college, particularly in Hispanic serving institutions. Informed by Tinto’s (1975, 1987, 1993) student academic and social integration model, Guiffrida’s (2003, 2004, 2005, 2006) model of relationships while at college, and ex-post facto research design, the study investigated personal and institutional factors that relate to Black students’ self-efficacy and persistence to the senior year in college. Data about Black ethnic undergraduate seniors’ (N = 236) academic and social experiences in college were collected using the Student Institutional Integration Survey (SIIS), an online questionnaire. Descriptive statistics were used to collect background information about the sample, correlation was calculated to indicate the degree of relationship between the variables, and multiple linear regressions were used to identify variables that are predictors of self-efficacy of persistence. Independent samples t-test and analyses of variance were computed to determine whether differences in perceptions of personal and institutional factors that relate to self-efficacy of persistence to the senior year in college could be identified between gender and ethnicity. Frequency was summarized to identify themes of participants’ primary motivation for finishing undergraduate degree programs. These themes were: (a) self-pride/personal goal, (b) professional aspiration/career (c) motivation to support family, (d) desire to have financial independence/better job, (e) to serve community, (f) opportunity to go to college, (g) being first-generation college student, and (h) prove to family the value of higher education. The research findings support the tenets of academic and social integration theories which suggest that students’ interaction with peer and faculty, relationships with family and friends, and involvement in institutional activities and organizations influence their persistence in college. Implications based on the findings affect institutional policy, curriculum, and program improvements that relate to Black undergraduate students’ academic and social support.

Institutional legacies, employment and professional integration of non EU/EEA doctors in France

Internationally, policies for attracting highly-skilled migrants have become the guidelines mainly used by the Organisation for Economic Co-operation and Development (OECD) countries. Governments are implementing specific procedures to capture and facilitate their mobility. However, all professions are not equal when it comes to welcoming highly-skilled migrants. The medical profession, as a protective market, is one of these. Taking the case of non-EU/EEA doctors in France, this paper shows that the medical profession defined as the closed labour market, remains the most controversial in terms of professional integration of migrants, protectionist barriers to migrant competition and challenge of medical shortage. Based on the path-dependency approach, this paper argues that non-EU/EEA doctors' issues in France derive from a complex historical process of interaction between standards settled in the past, particularly the historical power of medical corporatism, the unexpected long-term effects of French hospital reforms of 1958, and budgetary pressures. Theoretically, this paper shows two significant findings. Firstly, the French medical system has undergone a series of transformations unthinkable in the strict sense of a path-dependence approach: an opening of the medical profession to foreign physicians in the context of the Europeanisation of public policy, acceptance of non-EU/EEA doctors in a context of medical shortage and budgetary pressures. Secondly, there is no change of the overall paradigm: significantly, the recruitment policies of non-EU/EEA doctors continue to highlight the imprint of the past and reveal a significant persistence of prejudices. Non-EU/EEA doctors are not considered legitimate doctors even if they have the qualifications of physicians which are legitimate in their country and which can be recognised in other receiving countries.

Serial persistence in individual real estate returns in the UK

Purpose – The purpose of this paper is to examine individual level property returns to see whether there is evidence of persistence in performance, i.e. a greater than expected probability of well (badly) performing properties continuing to perform well (badly) in subsequent periods. Design/methodology/approach – The same methodology originally used in Young and Graff is applied, making the results directly comparable with those for the US and Australian markets. However, it uses a much larger database covering all UK commercial property data available in the Investment Property Databank (IPD) for the years 1981 to 2002 – as many as 216,758 individual property returns. Findings – While the results of this study mimic the US and Australian results of greater persistence in the extreme first and fourth quartiles, they also evidence persistence in the moderate second and third quartiles, a notable departure from previous studies. Likewise patterns across property type, location, time, and holding period are remarkably similar. Research limitations/implications – The findings suggest that performance persistence is not a feature unique to particular markets, but instead may characterize most advanced real estate investment markets. Originality/value – As well as extending previous research geographically, the paper explores possible reasons for such persistence, consideration of which leads to the conjecture that behaviors in the practice of institutional-grade commercial real estate investment management may themselves be deeply rooted and persistent, and perhaps influenced for good or ill by agency effects. - See more at: http://www.emeraldinsight.com/journals.htm?articleid=1602884&show=abstract#sthash.hc2pCmC6.dpuf

Institutional legacies and capabilities: work practices and employment relations in Portugal and Mozambique

This is a study of institutional change and continuity, comparing the trajectories followed by Mozambique and its formal colonial power Portugal in HRM, based on two surveys of firm level practices. The colonial power sought to extend the institutions of the metropole in the closing years of its rule, and despite all the adjustments and shocks that have accompanied Mozambique’s post-independence years, the country continues to retain institutional features and associated practices from the past. This suggests that there is a post-colonial impact on human resource management. The implications for HRM theory are that ambitious attempts at institutional substitution may have less dramatic effects than is commonly assumed. Indeed, we encountered remarkable similarities between the two countries in HRM practices, implying that features of supposedly fluid or less mature institutional frameworks (whether in Africa or the Mediterranean world) may be sustained for protracted periods of time, pressures to reform notwithstanding. This highlights the complexities of continuities which transcend formal rules; as post-colonial theories alert us, informal conventions and embedded discourse may result in the persistence of informal power and subordination, despite political and legal changes.

Institutional requirements for market-led development in Latin America

Includes bibliography

From authoritarianism to upheaval : the political economy of the Syrian uprising and regime persistence

The ensuing bloodshed and deteriorating humanitarian crisis in Syria, the failure of the United Nations Security Council to reach a consensus on what action to take, and the involvement of contending external actors partially reflect the complexity of the current impasse. Despite the importance of regional and international factors, however, this papers attempts to argue that the domestic dynamics of the Syrian crisis have been vitally important in determining the course of the popular uprising and the regime’s response. In this, Syria’s crisis belongs with the Arab Spring the trajectories and prospects of which have been shaped by dynamics within regimes. It will be seen that the formal and informal institutional structure of the Ba‘thist regime in Syria has been critical to its resilience and ability to stay united so far while attempting to crush a peaceful popular uprising that turned into insurgency in the face of the regime’s violent crackdown.

Family Types and the Persistence of Regional Disparities in Europe. Bruges European Economic Research (BEER) Papers 10/March 2007

This paper examines the association between one of the most basic institutional forms, the family, and a series of demographic, educational, social, and economic indicators across regions in Europe. Using Emmanuel Todd’s classification of medieval European family systems, we identify potential links between family types and regional disparities in household size, educational attainment, social capital, labour participation, sectoral structure, wealth, and inequality. The results indicate that medieval family structures seem to have influenced European regional disparities in virtually every indicator considered. That these links remain, despite the influence of the modern state and population migration, suggests that either such structures are extremely resilient or else they have in the past been internalised within other social and economic institutions as they developed.

Financial aid and the persistence of associate of arts graduates transferring to a senior university

This study examined the effects of financial aid on the persistence of associate of arts graduates transferring to a senior university in one of four consecutive fall semesters (1998-2001). Situated in an international metropolitan area in the southeastern United States, the institution where the study was conducted is a large public research university identified as a Hispanic Serving Institution. Archival databases served as the source of information on the academic and social background of the 4,669 participants in the study. Data from institutional financial aid records were pooled with the data in the student administrative system.^ For purposes of this study, persistence was defined as ongoing progress until completing the baccalaureate degree. Student social background variables used in the study were gender, ethnicity, age, and income, with GPA and part-time or full-time enrollment status being the academic variables. Amount and type of aid, including grants, loans, scholarships, and work study were incorporated in the models to determine the effect of financial aid on the persistence of these transfer students. Because the dependent variable persistence had three possible outcomes (graduated, still enrolled, dropped out) multinomial logistic regression was the appropriate technique for analyzing the data; four multinomial models were employed in the analysis.^ Findings suggest that grants awarded based on the financial need of students and loans were effective in encouraging the persistence of students, but scholarships and work study were not effective.^

Effects of student-faculty interactions on persistence of underprepared community college students

The high concentration of underprepared students in community colleges presents a challenge to educators, policy-makers, and researchers. All have pointed to low completion rates and caution that institutional practices and policy ought to focus on improving retention and graduation rates. However, a multitude of inhibiting factors limits the educational opportunities of underprepared community college students. Using Tinto's (1993) and Astin's (1999) models of student departure as the primary theoretical framework, as well as faculty mentoring as a strategy to impact student performance and retention, the purpose of this study was to determine whether a mentoring program designed to promote greater student-faculty interactions with underprepared community college students is predictive of higher retention for such students. While many studies have documented the positive effects of faculty mentoring with 4-year university students, very few have examined faculty mentoring with underprepared community college students (Campbell and Campbell, 1997; Nora & Crisp, 2007). In this study, the content of student-faculty interactions captured during the mentoring experience was operationalized into eight domains. Faculty members used a log to record their interactions with students. During interactions they tried to help students develop study skills, set goals, and manage their time. They also provided counseling, gave encouragement, nurtured confidence, secured financial aid/grants/scholarships, and helped students navigate their first semester at college. Logistic regression results showed that both frequency and content of faculty interactions were important predictors of retention. Students with high levels of faculty interactions in the area of educational planning and personal/family concerns were more likely to persist. Those with high levels of interactions in time-management and academic concerns were less likely to persist. Interactions that focused on students' poor grades, unpreparedness for class, or excessive absences were predictive of dropping out. Those that focused on developing a program of study, creating a road map to completion, or students' self-perceptions, feelings of self-efficacy, and personal control were predictive of persistence.

The relationship between a retention program and the persistence and graduation rates of first-generation low-income students at an urban, public university

The purpose of this study was to examine the relationship between participation in a retention program designed to promote academic and social integration and the persistence rates of first generation, low-income college students at an urban, public multiethnic university. Archival data were collected from the university’s Office of Institutional Research and the retention program office and included SAT/ACT scores, GPA, gender, ethnicity, and program participation data. A total of 292 first-generation, low-income students who were admitted to the university in the summer of 1999 were identified for the study. A group of 166 students were selected for the comparison group because they had not participated in the retention program; 126 students had participated in the retention program. ^ Three major research questions guided this study: (a) Are there differences in persistence rates and other academic characteristics of underprepared, low-income, first generation college students who participate and do not participate in the retention program?; (b) Does involvement in the retention program predict student persistence of first generation low-income, underprepared students?, and (c) Can predictors of GPA be identified for students in the retention program using program and descriptive variables? ^ A series of logistic regression analyses were conducted to assess the relationship between various retention services and the persistence and graduation rates of participants. The results showed that there were statistically significant relationships between participation and non-participation in the retention program and having higher GPAs and higher graduation and persistence rates. Of the four program features, participation in tutoring, workshops, and social events were found to be predictors of graduation. College GPA was also found to be a predictor of graduation for all students. The results also showed that women were more likely to graduate than men.^

Effects of student-faculty interactions on persistence of underprepared community college students.

The high concentration of underprepared students in community colleges presents a challenge to educators, policy-makers, and researchers. All have pointed to low completion rates and caution that institutional practices and policy ought to focus on improving retention and graduation rates. However, a multitude of inhibiting factors limits the educational opportunities of underprepared community college students. Using Tinto's (1993) and Astin's (1999) models of student departure as the primary theoretical framework, as well as faculty mentoring as a strategy to impact student performance and retention, the purpose of this study was to determine whether a mentoring program designed to promote greater student-faculty interactions with underprepared community college students is predictive of higher retention for such students. While many studies have documented the positive effects of faculty mentoring with 4-year university students, very few have examined faculty mentoring with underprepared community college students (Campbell and Campbell, 1997; Nora & Crisp, 2007). In this study, the content of student-faculty interactions captured during the mentoring experience was operationalized into eight domains. Faculty members used a log to record their interactions with students. During interactions they tried to help students develop study skills, set goals, and manage their time. They also provided counseling, gave encouragement, nurtured confidence, secured financial aid/grants/scholarships, and helped students navigate their first semester at college. Logistic regression results showed that both frequency and content of faculty interactions were important predictors of retention. Students with high levels of faculty interactions in the area of educational planning and personal/family concerns were more likely to persist. Those with high levels of interactions in time-management and academic concerns were less likely to persist. Interactions that focused on students' poor grades, unpreparedness for class, or excessive absences were predictive of dropping out. Those that focused on developing a program of study, creating a road map to completion, or students' self-perceptions, feelings of self-efficacy, and personal control were predictive of persistence.