Political Competition and Economic Divergence: European Development Before and After the Black

Jeremiah Dittmar and Luis Bosshart

No 16447, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We document how the Black Death activated political competition and led to economic divergence within Europe. Before the pandemic, economic development was similar in Eastern and Western German cities despite greater political fragmentation in the West. The pandemic led to a divergence that reflected regional differences in politics. After the pandemic, construction and manufacturing fell by 1/3 in the East relative to underlying trends and the Western path. Politics institutionalizing local self-government advanced in the West, but not in the East. This divergence is observed across otherwise similar cities along historic borders and foreshadows a subsequent divergence in agriculture.

Keywords: Institutions; Political economy; Cities; Growth (search for similar items in EconPapers)
JEL-codes: N13 N14 N60 N93 O10 O18 O40 O43 P48 (search for similar items in EconPapers)
Date: 2021-08
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