Interview with Dr Sascha Becker, Department of Economics
Published April 2011
What has led you to this area of research, and the former Habsburg Empire in particular?
For quite a while, I have been fascinated by long-run effects of history. In previous work, with my colleague Ludger Woessmann from LMU Munich, I looked into the long-run effects of the Protestant Reformation. The Protestant Reformers wanted people to be able to read the Bible and therefore put a lot of emphasis on education. Even half a millennium later, in Germany, Protestants are more educated than Catholics.
At some point, with our co-author Christa Hainz, we were wondering whether Empires that ruled large parts of Europe left a legacy that can still be noticed today. The Habsburg Empire seemed to be a natural case to look at. The Habsburgs ruled large parts of Eastern Europe for several centuries. In the context of Eastern Europe, they are considered to have had better institutions than, say, the Ottomans or the Russians. We teamed up with Katrin Boeckh, a historian, to develop our interdisciplinary research agenda on the Habsburg Empire.
Why is history important when considering economic development?
Economic development is influenced by formal economic and political institutions, but also by how citizens interact with these institutions and with each other. Formal rules can be easily written down on paper, but it takes time for them to be filled with life and to take root in a society. Lots of norms have formed in the past that influence the way we interact today.
Trust in state institutions, in the rule of law, has to build up over time and needs to be sustained over and over again by positive experience. "Failed states" around the world witness how difficult it is to create well-functioning and well-respected institutions. Good institutions that were created in the past are one way by which history matters for economic development.
What is the 'Habsburg Effect'?
In the context of our research, the 'Habsburg Effect' refers to our empirical finding that, in the year 2006, people in Eastern Europe who lived in locations that belonged to the Habsburg Empire before it disappeared in 1918, gave very different answers in a survey on trust and corruption than respondents just across the long-gone Habsburg border, in formerly Ottoman and Russian areas. The key to our empirical identification is that we looked at people that lived very close to each other, just to "inside" and "outside" the Habsburg border and within the same state today. We did not compare people in, say, Slovakia (which was entirely under Habsburg rule) to people in, say, Belarus (which was entirely under Russian rule). If we found differences at this level, we would not have know whether they had come from the fact that Slovakia and Belarus are very different from each other generally, independent of their historic experience.
Instead, we looked at people in Poland, Romania, Serbia, Montenegro and Ukraine. All these five countries historically had some areas that were under Habsburg rule and other areas that were under Prussian, Russian and/or Ottoman rule. People inside each of these five countries have shared the same institutions between 1918 and 2006, so if we found differences inside these countries between citizens to the left and right of the Habsburg border, they were likely to go back to pre-1918 differences. If so, we can associate them with differences between Habsburg rule and Prussian, Russian and/or Ottoman rule.
You measured trust and corruption in two public services - the courts and the police – across areas formerly ruled by the Habsburgs and non-Habsburg areas. What were the challenges of gathering this data?
Luckily, the Life in Transition Survey (LiTS), which was collected by the European Bank for Reconstruction and Development (EBRD), contains the exact place of residence for all survey respondents. This is unusual in so far as many surveys only give researchers information at the province or country level. The challenge was then to trace hundreds of towns and villages in Eastern Europe and the dates when they belonged to Habsburg, Prussia, and/or the Russian and Ottoman Empires. We had to consult historic maps, city archives and other historic sources to make sure we got things right.
Based on this information, we could then determine which survey respondents lived on which side of the historic Habsburg border. Our main finding is that, on the Habsburg side, still to this day, people have more trust in the courts and the police and that bribing is less common on the Habsburg side.
You found that in areas formerly ruled by the Habsburgs, interactions between individuals and state institutions were still – to this day - emulating historical models, yet local culture and interactions between individuals were not influenced by historical events. What do you think is the reason for this?
Our results suggest that higher trust levels on the Habsburg side are limited to interactions between individuals and state institutions. The fact that we do not find a "Habsburg effect" for trust between individuals is not saying that there is no trust, but simply that there is no difference in terms of trust between citizens when comparing people inside and outside of the Habsburg areas.
A possible reason is that outside Habsburg in, say, formerly Ottoman areas, people might not have trusted state institutions as much as people did on the Habsburg side, but they might well have trusted each other as much as people did on the Habsburg side.
What are the wider implications of your research in this area?
Nobel Prize winner Elinor Ostrom emphasized that trust in the key institutions of the state, and their proper functioning, is crucial in facilitating collective action. Our research gives further empirical support to her work, when looking at the persistence of trust in state institutions fostered under Habsburg rule, which can still be noticed today.
Dr Sascha Becker works on Prussian economic history, with particular reference to the Protestant Reformation. Other work looks at the role of education in the Demographic Transition, as well as the long-run economic effects of historic institutions.