This study explores the consequences and origins of between-ethnicity economic inequality across countries. First, combining satellite images of nighttime luminosity with the historical homelands of ethnolinguistic groups we construct measures of ethnic inequality for a large sample of countries. We also compile proxies of overall spatial inequality and regional inequality across administrative units. Second, we uncover a strong negative association between ethnic inequality and contemporary comparative development; the correlation is also present when we condition on regional inequality, which is itself related to under-development. Third, we investigate the roots of ethnic inequality and establish that differences in geographic endowments across ethnic homelands explain a sizable fraction of the observed variation in economic disparities across groups. Fourth, we show that ethnic-specific inequality in geographic endowments is also linked to under-development.

We investigate the role of deeply-rooted pre-colonial ethnic institutions in shaping comparative regional development within African countries. We combine information on the spatial distribution of ethnicities before colonization with regional variation in contemporary economic performance, as proxied by satellite images of light density at night. We document a strong association between pre-colonial ethnic political centralization and regional development. This pattern is not driven by differences in local geographic features or by other observable ethnicspecific cultural and economic variables. The strong positive association between pre-colonial political complexity and contemporary development obtains also within pairs of adjacent ethnic homelands with different legacies of pre-colonial political institutions.

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We study the implications of the Great Recession for voting for antiestablishment parties, as well as for general trust and political attitudes, using regional data across Europe. We find a strong relationship between increases in unemployment and voting for nonmainstream parties, especially populist ones. Moreover, unemployment increases in tandem with declining trust toward national and European political institutions, though we find only weak or no effects of unemployment on interpersonal trust. The correlation between unemployment and attitudes toward immigrants is muted, especially for their cultural impact. To explore causality, we extract the component of increases in unemployment explained by the precrisis structure of the economy, in particular the share of construction in regional value added, which is strongly related both to the buildup preceding and the bursting of the crisis. Our results imply that crisis-driven economic insecurity is a substantial determinant of populism and political distrust. A specter is haunting Europe and the West-the specter of populism.

This article challenges cross-sectional findings that democracy has a negligible effect on growth. We employ a new dataset of political transitions during the Third Wave of Democratisation and examine the within effect of democratisation in countries that abandoned autocracy and consolidated representative institutions. The panel estimates imply that on average democratisations are associated with a 1% increase in annual per capita growth. The dynamic analysis reveals that: while during the transition growth is slow, in the medium and long run it stabilises at a higher level. This evidence favours development theories of democratic rule and Friedrich Hayek (1960)Õs idea that the merits of democracy appear in the long run.Leading politicians and commentators have argued that democratisation will bring prosperity and growth into ÔpariahÕ and economically poorly performing countries. 1 Others, however, remain sceptical, pointing to the mixed and inconclusive empirical evidence. The old debate dating back to Plato and Aristotle, on which political regime is socially and economically optimal arises again. This debate is not purely academic and philosophical as it has important policy implications. In the last thirty years, the world has experienced an unprecedented move towards democratic institutions. Influential policy makers and scholars urge Western authorities to foster democratic movements in totalitarian countries; see The Economist article ÔPhilosophers and KingsÕ (June 19th 2003). Yet the question remains: ÔWill democratisation bring economic growth?Õ To assess the average growth effect of a successful democratic transition we analyse the evolution of annual real per capita GDP growth before and after incidents of permanent democratic reform in the 1960-2003 period. In our analysis we exploit a newly constructed dataset of permanent democratisations during the so-called Third Wave of Democratisation and the 1990s when many former socialist countries moved towards representative rule. The panel results reveal new evidence that contrast with the previous, mainly cross-sectional, work. First, conditioning on time-invariant country characteristics and global shocks, a permanent democratisation is associated with approximately a one half to one per cent increment in annual real per capita GDP growth. Second, a dynamic J-shaped effect emerges with considerable (though not

The predominant explanations on the deep roots of contemporary African development are centered around the influence of Europeans during the colonial period (Acemoglu, Johnson, and Robinson 2001Robinson , 2002Robinson , 2005, but also in the centuries before colonization when close to 20 million slaves were exported from Africa (Nunn 2008). Yet in the period between the ending of the slave trades and the beginning of the colonial rule, another major event took place that, according to the African historiography, had malicious long-lasting consequences. During the "Scramble for Africa," that starts with the Berlin Conference of 1884-1885 and is completed by the turn of the twentieth century, Europeans partitioned Africa into spheres of influence, protectorates, and colonies. The borders were designed in European capitals at a time when Europeans had barely settled in Africa and had limited knowledge of local conditions. Despite their arbitrariness, boundaries outlived the colonial era.

Do high levels of human capital foster economic growth by facilitating technology adoption? If so, countries with more human capital should have adopted more rapidly the skilled-labor augmenting technologies becoming available since the 1970's. High human capital levels should therefore have translated into fast growth in more compared to less human-capital-intensive industries in the 1980's. Theories of international specialization point to human capital accumulation as another important determinant of growth in human-capital-intensive industries. Using data for a large sample of countries, we find significant positive effects of human capital levels and human capital accumulation on output and employment growth in human-capital-intensive industries.-------------

We investigate the role of national institutions on subnational African development in a novel framework that accounts for both local geography and cultural-genetic traits. We exploit the fact that the political boundaries on the eve of African independence partitioned more than 200 ethnic groups across adjacent countries subjecting similar cultures, residing in homogeneous geographic areas, to different formal institutions. Using both a matching type and a spatial regression discontinuity approach we show that differences in countrywide institutional structures across the national border do not explain within-ethnicity differences in economic performance, as captured by satellite images of light density. The average noneffect of national institutions on ethnic development masks considerable heterogeneity partially driven by the diminishing role of national institutions in areas further from the capital cities.