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Combining datasets on the 1920 Protestant diffusion in China and the financial reports of about 125,000 Chinese industrial firms from 1999 to 2007, we find significant effects of historical Protestant activities on current corporate tax avoidance. We then use disaster frequency as the instrumental variable to establish causality. Analysis of the survey-based CFPS data and a peer-to-peer lending dataset with more than one million borrowers shows that people from cities with more historical Protestant activities tend to trust others more and have better credit records. By illustrating the role of Protestantism in fostering social capital, our analysis suggests persistent effects of religion on individual and corporate behaviors.

We examine the different functions of the government and of local elites in eighteenth-century China by considering their responses to grain price fluctuations, which were the largest shocks to traditional agrarian society. Descriptive evidence has indicated that both the government and the local elites provided public goods that mitigated high grain prices and maintained social stability. However, few studies to date have quantitatively compared the importance of these two types of service. We construct a prefecture-level set of panel data from 1742 to 1795 to compare the effects of government-managed granary with the effects of community services provided by local elites, and we show how these effects varied by region. The results show that although higher grain prices commonly led to increased conflict across China, this pattern did not apply in the most prosperous regions, namely the North and the Lower Yangzi. This set of findings suggests the existence of effective interventions to deal with food-supply crises. Further investigations show that although the government played a dominant role in the North, the local elites were more effective for reducing price fluctuations in the Lower Yangzi. We also provide several explanations for the different patterns of crisis relief found in the two examined regions.

Does culture, and in particular religion, exert an independent causal effect on long-term economic growth, or do culture and religion merely reflect the latter? We explore this issue by studying the case of Protestantism in China during the late nineteenth and early twentieth centuries. Combining county-level data on Protestant presence in 1920 and socioeconomic indicators in 2000, we find that the spread of Protestantism has generated significant positive effects in long-term economic growth, educational development, and health care outcomes. To better understand whether the relationship is causal, we exploit the fact that missionaries purposefully undertook disaster relief work to gain the trust of the local people. Thus, we use the frequency of historical disasters as an instrument for Protestant distribution. Our IV results confirm and enhance our OLS results. When we further investigate the transmission channels over the long historical period between 1920 and 2000, we find that although improvements in education and health care outcomes account for a sizable portion of the total effects of missionaries’ past activities on today’s economic outcomes, Protestant activities may have also contributed to long-term economic growth through other channels, such as through transformed social values. If so, then a significant amount of China’s growth since 1978 is the result not just of sudden institutional changes but of human capital and social values acquired over a longer historical period.

Our paper provides a comparative perspective on the development of public primary education in four of the largest developing economies circa 1910: Brazil, Russia, India and China (BRIC). These four countries encompassed more than 50 percent of the world’s population in 1910, but remarkably few of their citizens attended any school by the early 20th century. We present new, comparable data on school inputs and outputs for BRIC drawn from contemporary surveys and government documents. Recent studies emphasize the importance of political decentralization, and relatively broad political voice for the early spread of public primary education in developed economies. We identify the former and the lack of the latter to be important in the context of BRIC, but we also outline how other factors such as factor endowments, colonialism, serfdom, and, especially, the characteristics of the political and economic elite help explain the low achievement levels of these four countries and the incredible amount of heterogeneity within each of them.

This paper examines the state and scope of the study of economic history of developing regions, underlining the importance of knowledge of history for economic development. While the quality of the existing research on developing countries is impressive, the proportion of published research focusing on these regions is low. The dominance of economic history research on the North American and Western European success stories suggests the need for a forum for future research that contributes to our understanding of how institutions, path dependency, technological change and evolutionary processes shape economic growth in the developing parts of the world. Many valuable data sets and historical episodes relating to developing regions remain unexplored, and many interesting questions unanswered. This is exciting. Economic historians and other academics interested in the economic past have an opportunity to work to begin to unlock the complex reasons for differences in development, the factors behind economic disasters and the dynamics driving emerging success stories.