Political Economy.

• Position: Bureau News

The NBER's Political Economy Program met in Cambridge on May 6. Program Director Alberto Alesina of Harvard University organized the meeting at which these papers were discussed:

Enrico Spolaore, Tufts University, and Romain Wacziarg, Stanford University and NBER, "The Diffusion of Development"

Discussant: Francesco Caselli, London School of Economics and NBER

Paola Giuliano and Antonio Spilimbergo, IMF, and Giovanni Tonon, Dana-Farber Cancer Institute, "Genetic Map for Economist"

Discussant: Luigi Zingales, Harvard University and NBER

Alberto Alesina; William Easterly, New York University; and Janina Matuszeski, Harvard University, "Artificial States"

Discussant: Ernesto Dalbo, University of California, Berkeley

Efraim Benmelech, Harvard University, and Tobias J. Moskowitz, University of Chicago and NBER, "The Political Economy of Financial Regulation: Evidence from U.S. State Usury Laws in the 18th and 19th Century"

Discussant: Antoinette Schoar, MIT and NBER

Edward L. Glaeser and Andrei Shleifer, Harvard University and NBER, and Giacomo Ponzetto, Harvard University, "Why Does Democracy Need Education?"

Discussant: Simon Johnson, MIT and NBER

Raghuram G. Rajan, IMF and NBER, and Luigi Zingales, "The Persistence of Underdevelopment: Institutions, Human Capital, or Constituencies?"

Discussant: Pedro Dalbo, Brown University

Spolaore and Wacziarg study the barriers to the diffusion of development across countries over the very long run. They find that genetic distance, a measure associated with the amount of time elapsed since two populations' last common ancestors, bears a statistically and economically significant correlation with pairwise income differences, even after controlling for various measures of geographical isolation, and other cultural, climatic, and historical differences. These results hold not only for contemporary income differences but also for income differences measured since 1500, and for income differences within Europe. Similar patterns of coefficients exist for the proximate determinants of income differences, particularly for differences in human capital and institutions. This paper discusses the economic mechanisms that are consistent with these facts. It presents a framework in which differences in human characteristics transmitted across generations--including culturally transmitted characteristics--can affect income differences by creating barriers to the diffusion of innovations, even when they have no direct...