Institutional Transplant and Cultural Proximity: Evidence from Nineteenth-Century Prussia

Abstract

This article presents evidence that cultural proximity between the exporting and the receiving countries positively affects the adoption of new institutions and the resulting long-term economic outcomes. We obtain this result by combining new information on pre-Napoleonic principalities with county-level census data from nineteenth-century Prussia. We exploit a quasi-natural experiment generated by radical Napoleonic institutional reforms and the deeply rooted cultural heterogeneity across Prussian counties. We show that institutional reforms in counties that are culturally more similar to France, in terms of religious affiliation, generate better long-term economic performance.

Resistance to Institutions and Cultural Distance: Brigandage in Post-Unification Italy

“…This is not the first work to make use of institutional transplantations to analyze the relationship between cultural traits and institutional effectiveness. For instance, Lecce and Ogliari (2017) study the long-run economic effect of the interaction between culture and the imposition of French institutions on Prussian counties during the Napoleonic occupation. However, transplanted institutions face the possibility of immediate rejection by the recipient: this rejection may come in different forms, ranging from violent uprising against the donor (as in our case) to the local bureaucracy's prevention of the application of the foreign law or use of the transplanted institutions to different ends than those for which they were originally intended (as in Kurkchiyan, 2009).…”

Can Institutional Transplants Work? A Reassessment of the Evidence from Nineteenth-Century Prussia

“…Assessment of that claim requires more detailed data. The Prussian data analysed by Lecce and Ogliari (2019) (henceforth LO) meet this requirement.…”

“…Where a Prussian region had informal institutions resembling those in France, they argue, short periods of formal institutional reform had positive effects; conversely, where a Prussian region was culturally dissimilar to France, reforms had negative effects. LO's general conclusion from their analysis is that the result of foreign institutional transplantation is likely to depend on its compatibility with social norms in the importing country (Lecce andOgliari 2019, 1090). This paper revisits LO's empirical analysis, and finds that it is invalidated by omitted variable bias.…”

“…

The institutional reforms France imposed in the parts of Germany it occupied in the late eighteenth and early nineteenth centuries are claimed to provide an example of successful externally-imposed institutional reforms. The most detailed study is that of Lecce and Ogliari (2019), who argue that the effectiveness of transplanted French institutions in different parts of Prussia depended on the cultural proximity between France and the relevant part of Prussia. However, Lecce and Ogliari take no account of a widely-recognized feature of nineteenth-century Prussian economic development: the importance of regional effects.

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Resistance to Institutions and Cultural Distance: Brigandage in Post-Unification Italy

“…This reduces concerns of under-controlling for relevant economic factors and allows us to isolate the importance of cultural proximity. In the same spirit, Lecce and Ogliari (2017) show that the key to the long-run success of institutional transplantations is not the set of underlying cultural traits but the cultural proximity between donor and recipient. They test their hypothesis by studying the imposition of French institutions on Prussian counties during the Napoleonic occupation and the long-run effectiveness thereof, assessing the effect of cultural proximity on what we may call the degree of institutional sedimentation.…”