Economic persistence despite adverse policies: Evidence from Kyrgyzstan

Abstract: We study the long-run persistence of relative economic well-being in the face of highly adverse government policies using a combination of rich historical and contemporaneous data sources from Kyrgyzstan. Even after controlling for unobservable local effects, the economic well-being (measured by income, expenditures, or assets) of Kyrgyz households in the 2010s strongly correlates with the early 20th-century average wealth of the tribes from which these households descend. The degree of economic inequality at the tribe level in the 2010s correlates with the within-tribe wealth inequality in the early 20th century. In terms of channels of persistence, we find support for the inter-generational transmission of human capital, relative status, political power, and cultural traits. Transmission of material wealth, differences in natural endowments, or geographic sorting cannot explain the observed long-run persistence.

Authors: Catherine Guirkinger, University of Namur, Gani Aldashev, Université libre de Bruxelles, Alisher Aldashev, New School of Economics, Satbayev University, and Mate Fodor, New School of Economics, Satbayev University