Social Capability, History and the Economies of Communist and Postcommunist States

Abstract

Studies show that in non-Communist developed and developing countries earlier development of agriculture, a dense population, and a state-level polity is associated with a higher income and more rapid economic growth in the late twentieth century. We investigate whether this was also the case for countries under communism and for the same countries in transition to a market economy. Our findings are generally affirmative, with an interesting pattern for the Eurasian socialist core countries involving higher growth nearer their West European and East Asian poles. We also find that ethnic fractionalization, which is correlated with late premodern development, shows harmful effects in the transition era but not under communism.

State history and economic development: evidence from six millennia

“…Bockstette et al's data were subsequently expanded to include more ex-Communist countries (Iliev and Putterman 2007), more African countries (Cinyabuguma and Putterman 2011), and a few other countries for which complementary income or other required data had initially been viewed as unreliable. Based on this extended dataset, Putterman and Weil (2010) demonstrated that the ability of state history to predict current levels of development is greatly strengthened by replacing the state history that transpired on a given country's territory by the weighted average state history of the places in which current residents' ancestors lived in the past.…”

State History and Economic Development: Evidence from Six Millennia

“…Roughly the same data set was also used by Chanda and Putterman (2005), and Chanda and Putterman (2007). Bockstette et al's data were subsequently expanded to include more ex-Communist countries (Iliev and Putterman 2007), more African countries (Cinyabuguma and Putterman 2011), and a few other countries for which complementary income or other required data had initially been viewed as unreliable. Based on this extended dataset, Putterman and Weil (2010) demonstrated that the ability of state history to predict current levels of development is greatly strengthened by replacing the state history that transpired on a given country's territory by the weighted average state history of the places in which current residents' ancestors lived in the past.…”

The Contribution of Human Capital towards Economic Growth in China

“…Technologies are usually developed according to the requirements of the country in which such technologies have first evolved. However, the formation of the appropriate human capital can, to some extent, overcome such gaps of technological incongruence and hence enhances the social capability of the recipient country (Dahlman and Perkins, 1995;Koo and Perkins, 1995;OECD, 2001;Iliev and Putterman, 2007). The greater the absorptive capacity, the greater the effectiveness of FDI and incoming spillovers will be on productivity.…”