Abstract
This chapter delves into the role of historical institutions and culture in current regional economic inequality in Spain. It starts from the theoretical basis that there exist certain cultural traits that are associated with a better economic performance within a liberal institutional framework—generalized trust, orientation toward political issues, associative participation, attitudes toward individual independence, etc. are highly persistent and were partly shaped by political experiences in the distant past. With regard to the relevant historical facts that could have led to the promotion of these cultural traits, this study relies on two different but related works: Tabellini (Journal of the European Economic Association, 8(4), 677–716, 2010) and Guiso et al. (Journal of the European Economic Association, 6(2–3), 295–320, 2008). Specifically, two historical political aspects that vary regionally are considered: the type of political institutions in the Early Modern Age and the level of local autonomy in the High Middle Ages. The former is measured by the political constraints on the executive within the period 1600–1850 and the latter by the level of autonomy in the formation process of the local legal order between the eleventh and fifteenth centuries. This work empirically tests this causal argumentation that relates past political institutions to current regional economic distribution through this cultural legacy. The results support this hypothesis and are robust even against other so-called fundamental causes of development such as geography and human capital.
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- 1.
From the question: “Generally speaking, would you say that most people can be trusted or that you need to be very careful in dealing with people?” Two options are offered: “Most people can be trusted” and “Can’t be too careful.”
- 2.
From the question: “Some people feel they have completely free choice and control over their lives, while other people feel that what they do has no real effect on what happens to them. Please use this scale where 1 means “none at all” and 10 means “a great deal” to indicate how much freedom of choice and control you feel you have over the way your life turns out.
- 3.
Information about the past two variables comes from WVS’ following question: “Here is a list of qualities that children can be encouraged to learn at home. Which, if any, do you consider to be especially important? Please choose up to five.” The offered qualities are: independence, hard work, feeling of responsibility, imagination, obedience, tolerance and respect for other people, thrift, perseverance, religious faith, and unselfishness.
- 4.
Tabellini computes the principal component from the four variables at individual level. As we use data from different surveys, we cannot apply the same methodology. First, we compute the provincial average of each variable and then we extract the principal component.
- 5.
From WVS, we use the waves from 1991, the first wave with Spain included, to 2005.
- 6.
From ESS, we take every available wave: 2002, 2004, 2006, 2008, 2010, and 2012.
- 7.
Using the same question from which Tabellini took obedience and respect as qualities to promote in children.
- 8.
From the literal question: “Now I will briefly describe some people. Please listen to each description and tell me how much each person is or is not like you. Use this card for your answer. It is important to her/him to make her/his own decisions about what she/he does. She/he likes to be free and not depend on others.” Options range from “very like me” to “not like me at all.”
- 9.
From a similar question to the WVS’ one: “Using this card, generally speaking, would you say that most people can be trusted, or that you can’t be too careful in dealing with people? Please tell me on a score of 0–10, where 0 means you can’t be too careful and 10 means that most people can be trusted.”
- 10.
Autonomous cities of Ceuta and Melilla are not included.
- 11.
From the surveys: CIS (1992), CIS (1998), and CIS (2002). In the three of them, the same question is asked: “Generally speaking, would you say that you are interested in politics a lot, considerably, a little, or nothing at all?” We use the provincial percentage of people who answer “a lot” or “quite” and create a single variable from the principal component of all of them.
- 12.
From the surveys: CIS (1998) and CIS (2002). Both surveys ask this question: “Generally speaking, would you consider you are very informed, quite informed, a little informed, or not informed at all about the activities developed by your autonomous community’s government? What about the activities of your autonomous community’s parliament? What about your city council’s activities?” We use the provincial percentage of people who answer “very informed” or “quite informed” and create a single variable from the principal component of all of them.
- 13.
From survey CIS (1992), we use the question “Could you tell me how often you read general information newspapers? How often do you listen to the news on the radio? How often do you watch the news on TV?” And from CIS (2010), we use the slightly different question “Now, I would like to ask you some questions about newspapers, radio, and television. How often do you listen or watch the news in the radio or television? Apart from news, do you listen or watch other shows about politics in the radio or television? Apart from sport press, do you read the newspaper (in paper or the Internet)? Do you use the Internet in order to get information about politics or society?” We use provincial percentage of people who answer “every day” and create a single variable from all media in both surveys.
- 14.
From CIS (1998). We obtain this information from the question: “From the following associations and organizations, can you tell me about each of these organizations whether you belong, whether you have ever belonged, or whether you never belonged to…?” The kinds of associations listed are “sport associations and groups,” “local or regional societies,” “religious associations,” “educative, artistic, and cultural associations and groups,” “juvenile organizations or groups,” “charitable associations,” “ecologist associations,” “labor unions,” “political parties,” “human rights organizations,” “pacifist movement’s association,” and “feminist associations.” We use the provincial percentage of people who answer that they belong or belonged to it for each case and extract the principal component from all organizations.
- 15.
This perspective is obtained from Putnam et al. (1993).
- 16.
The original values for this principal component in Tabellini (2010) from his sample of five countries are different, since here we compute a new principal component from a sample reduced to only the Spanish regions.
- 17.
In some places of the so-called Extremadura leonesa – Zamora and Salamanca – some legislative flexibility was permitted, even when Liber Iudiciorum was the official legislation. Local law was complemented in order to adapt local organization to frontier conditions. However, we are not going to equalize this legal flexibility to the custom-based law of northeastern regions.
- 18.
Proof can be seen in Wooldridge (2010, chapter 16).
- 19.
In order to expedite the exposition of the problem, we ignored the distinctive civil laws of Catalonia, Aragon, Valencia, Basque provinces, and Navarre, which persisted somehow until nowadays. In Section 4.3, we will discuss and test the role of these regionally distinctive private laws in our model.
- 20.
1860 is the first year for which we have complete data. This moment is effective after the Liberal Revolution, but 1860’s series is very similar to that of 1787, showing a correlation of 0.88.
- 21.
It makes sense if we consider that only first generations will withstand the differential due to the new institutional context; thus, the largest part of adult population will maintain its previous literacy level. This assumption implies a delay from the moment that institutional transformation is undertaken until the moment literacy rates are completely adapted in all age ranges of the population. But still we are ignoring many other important aspects that could delay this adaptation, like material possibilities to access education or the widespread low awareness of the importance of education (Ruiz 1988).
- 22.
La riqueza de las regiones by Rafael Domínguez (2002) is another work that also mentions geographical causes to Spain’s current regional inequality.
- 23.
The problem of weak instruments in column (4) is solved when socialcapital is instrumented only by customary. In the case of validity in Equation (3), when trust is instrumented solely by pc_instit_mod, the equation is only identified, so overidentification test cannot be used.
- 24.
For instance, the Ley 41 of Cortes de Navarra of 1780–1781 provides for free and compulsory education to all the children between 5 and 12 years old (Ruiz 1988).
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Appendices
Appendix 1: Variables’ Description, Aggregation, and Source
Variable | Description | Aggregation | Source |
|---|---|---|---|
lgdppc9510 | Log of annual average per capita GDP during the period 1995–2010 | Province | INE |
lgrowth9510 | Log of annual average per capita GDP growth in 1995–2010 | Province | Based on INE data |
Variables on culture | |||
socialcapital | Principal component from information about citizen’s political implication and associative participation, following Mota and Subirats (2000) | Province | Based on CIS data |
independence | Principal component from variables on society’s attitudes toward individual independence | Community | Based on WVS and ESS data |
trust | Principal component from information about generalized trust | Community | Based on WVS and ESS data |
culture | Principal component from last three variables | Province | Own |
Instrumental variables | |||
liberiudiciorum | Legal order based on Visigothic Liber Iudiciorum in High Middle Ages | Province | Based on Barrero and Alonso (1989), García- Gallo (1979) and Gacto et al. (2009) information |
customary | Custom-based legal order in High Middle Ages | Province | |
pc_institutions | Assessment of constraints on the executive during the period 1600–1850 | Province | Tabellini (2010) |
pc_instit_mod | Modified version of pc_institutions | Province | Own |
Control variables | |||
urban1860 | Urbanization rate in 1860 | Province | Tafunell (2005) |
lgdppc1800 | Relative index of per capita GDP in 1800 | Community | Carreras et al. (2005) |
illiteracy1887 | Illiteracy rates in 1887 | Province | Vilanova and Moreno (1992) |
latitude | Latitude degrees of the capital of the province | Province | Agencia Española de Meteorología (aemet.es) (2013) |
longitude | Longitude degrees of the capital of the province | Province | aemet.es (2013) |
altitude | Altitude in meters of the capital of the province | Province | AEMET (2012) |
densicoast | Province’s coast length divided by province area | Province | Based on INE (2003) data |
educ9510 | Average proportion of active population with post-compulsory education during the period 1995–2010 | Province | Fundación Bancaja and Instituto Valenciano de Investigaciones Económicas, IVIE (2014) |
stock9510 | Provincial productive capital stock in tens of thousands of euros per inhabitant during the period 1995–2010 | Province | Fundación BBVA and Instituto Valenciano de Investigaciones Económicas, IVIE (2013) |
stockpub9505 | Provincial public stock of net capital in tens of thousands of euros per inhabitant during the period 1995–2005 | Province | Fundación BBVA and Instituto Valenciano de Investigaciones Económicas, IVIE (2009) |
eqi | European Quality of Government Index | Community | Charron et al. (2013) |
congestion0410 | Average judicial congestion during the period 2004–2010 | Province | Consejo General del Poder Judicial, CGPJ |
Appendix 2: Main Descriptive Statistics
Variable | Obs | Mean/freq. | Std. dev. | Min | Max |
|---|---|---|---|---|---|
lgdppc9510 | 50 | 9.72 | 0.20 | 9.39 | 10.15 |
lgrowth9510 | 50 | −0.01 | 0.154 | −0.44 | 0.33 |
socialcapital | 50 | 0 | 1 | −1.84 | 3.19 |
trust | 50 | 0 | 1 | −1.69 | 1.90 |
independence | 50 | 0 | 1 | −2.00 | 1.80 |
culture | 50 | 0 | 1 | −1.64 | 3.00 |
liberiudiciorum | 50 | 25a | |||
customary | 50 | 20a | |||
pc_institutions | 50 | 0 | 1 | −0.50 | 1.98 |
pc_instit_mod | 50 | 0 | 1 | −0.49 | 3.07 |
illiteracy1887 | 50 | 0.64 | 0.13 | 0.35 | 0.84 |
urban1860 | 50 | 0.19 | 0.17 | 0.02 | 0.66 |
lgdppc1800 | 50 | 4.56 | 0.31 | 3.93 | 5.14 |
latitude | 50 | 40.10 | 3.16 | 28.2 | 43.5 |
longitude | 50 | 3.84 | 3.73 | −2.82 | 16.25 |
altitude | 50 | 0.37 | 0.368 | 0.01 | 1.13 |
densicoast | 50 | 0.03 | 0.06 | 0 | 0.29 |
educ9510 | 50 | 0.75 | 0.05 | 0.57 | 0.83 |
stock9510 | 50 | 2.98 | 0.77 | 1.78 | 5.29 |
stockpub9505 | 50 | 1.16 | 0.35 | 0.70 | 2.52 |
eqi | 50 | 0.11 | 0.32 | −0.47 | 0.67 |
congestion0410 | 50 | 1.30 | 0.06 | 1.19 | 1.45 |
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Soto-Oñate, D. (2015). The Historical Origins of Regional Economic Inequality in Spain: The Cultural Legacy of Political Institutions. In: Schofield, N., Caballero, G. (eds) The Political Economy of Governance. Studies in Political Economy. Springer, Cham. https://doi.org/10.1007/978-3-319-15551-7_5
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