Endogenous Political Fragmentation: The Role of Property Rights in Historical Perspective
Focus of the study
Land is an important asset in determining wealth, and therefore institutional frameworks for property rights – whether legally or informally arranged – are critical components that either can contribute to or constrain economic development. This research project is designed to set up a theoretical model of endogenous invasion and resistance to invasion, based on the diversity of historical property rights arrangements over time and space.
In countries like medieval France and Europe, lords had strong property rights over their land, and it was costlier to buy their loyalty. In countries with weak private property rights like Imperial China or the Ottoman Empire, where the ruler held claims over land, lords (governors) had more to lose from betraying the Emperor. The model predicts more invasion and political fragmentation of territories where private property rights are strong and vice-versa. This generally explains why Europe was fragmented most of its history, but China was not. We plan to gather historical data on property rights of land over time to test these predictions in a panel context.
Broader motivation for the research
This project is part of the literature on secession, unification and endogenous border formation of countries. It is relevant for countries where land is an important asset in determining wealth. It is thus relevant in history and in developing countries where agriculture still plays a dominant role. The literature on comparative historical development usually takes as given the contrast in historical development between China and Europe, where Europe’s fragmentation and China’s lack of fragmentation are taken as given, and their consequences are examined in for example the comparative history book by Rosenthal and Wong (2012).
The big question remains unanswered: why was Europe fragmented and China was not? Europe and China are two extremes, but the evolution of the Ottoman Empire and of India should also be brought into the analysis.
Our argument is that security of private property rights may lead to political fragmentation, an argument that to our knowledge nobody has made in the massive literature on property rights that often focuses on the direct economic impact (output and investment). Based on our model, we want to examine empirically to what extent stronger security of private property rights is associated to political fragmentation. Our analysis also provides an alternative perspective to the resource curse literature, which often assumes a complementarity between strong/weak state and strong/weak property rights. In contrast, our framework allows us to understand the association among strong/weak private property rights, weak/strong state capacity, and fragile/stable political centralization, which we observe in ancient China, Europe, and many contemporary developing countries.
- Gerard Roland, UC Berkeley
- Ruixue JIA, UC San Diego
- Yang XIE, UC Riverside