Public good provision is a powerful channel through which persistence in comparative development comes about

From On Roman roads and the sources of persistence and non-persistence in development by Carl-Johan Dalgaard, Nicolai Kaarsen, Ola Olsson, Pablo Selaya.

Spatial differences in economic development tend to be highly persistent over time. Comin et al. (2010) document, for example, that countries that were closer to the technological frontier as early as 1500 CE are comparatively richer and more technologically sophisticated today, while Maloney and Valencia (2016) document persistence in population density across half a millennium, comparing regions at the sub-national level within the New World. Findings such as these have led to a large literature that tries to identify fundamental sources of comparative development in initial conditions, and historical processes from the distant past. Spolaore and Wacziarg (2013), Nunn (2014), and Ashraf and Galor (2018) present recent surveys. At the same time, differences in comparative development are not always persistent. For example, Acemoglu et al. (2002) document a reversal of fortune across former colonies during the last 500 years.

These findings raise questions about which proximate factors generate the observed persistence in comparative development, and why the persistence sometimes breaks down. In this regard, we know much less. A deeper understanding of the channels through which persistence in comparative development emerges may leave clues about which fundamentals are important, and how to support development in situations where these fundamentals are lacking.

In a recent study, we explore the persistence and non-persistence of a key proximate source of growth – public goods provision (Dalgaard et al. 2018). The specific form of public good in focus is roads, and we take the roads built during the Roman Empire as our point of departure. In particular, we examine the persistence in road density across time, and its role in generating persistence in economic development across regions that were part of the Roman Empire at the beginning of the 2nd century.

They overlay a map of Roman Roads on modern satellite maps that capture nighttime luminosity as a crude proxy for development.

Click to enlarge.

The researchers do their best to control a variety of confounding variables.

What is interesting to me is their exploitation of a natural historical experiment, the fact that wheeled transport disappeared in the Middle East and North Africa (MENA) during the second half of the first millennium CE. What they find is that:

In some ways, the emergence of the Roman road network is almost a natural experiment – in light of the military purpose of the roads, the preferred straightness of their construction, and their construction in newly conquered and often undeveloped regions. This type of public good seems to have had a persistent influence on subsequent public good allocations and comparative development. At the same time, the abandonment of the wheel shock in MENA appears to have been powerful enough to cause that degree of persistence to break down. Overall, our analysis suggests that public good provision is a powerful channel through which persistence in comparative development comes about.