My research concentrates on applied economics, with a particular focus on economic history, development economics, and political economy.
Breaking the Unbreakable Union: Nationalism, Disintegration and the Soviet Economic Collapse, accepted at the Economic Journal
This paper investigates the effect of prospective secessions on economic integration and growth by examining the break-up of the Soviet Union in the late 1980s and early 1990s. Firstly, I show theoretically how regional elites had an incentive to restrict domestic trade once secession from the Union became possible. Secondly, I show empirically that the increased likelihood of secessions by the Union’s member republics strongly cut domestic trade. Thirdly, I show how this explains the severity of the Soviet output fall. These patterns persist once I instrument for prospective secessions with nationalist agendas that are exogenous to trade or growth.
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Shaping the Size of Nations: A Test of the Empirical Determinants of Secessions
Little is known about the empirical determinants of state formation and dissolution, despite a rich theoretical literature on the subject. Chapter three attempts to fill that gap by treating the dissolution of the Soviet Union as a historical experiment in state breakup. I exploit regional variation in separatist protests across the 184 provinces of the Union to measure varying incentives to secede. This allows for a test of economic theories of secession (Alesina & Spolaore, 1997). These theories predict that the incentive to secede should be determined by the trade-off between the cost of public goods provision and preference heterogeneity. I find strong evidence for the existence of this trade-off in shaping demand for secession. However, I also show that this popular demand for secession had little causal effect on actual separatist policy once exogenous variation in the propensity to protest from weather data is taken into account.
Market Integration, Financial Institutions and Ethnic Segregation (with Nikolaus Wolf, HU Berlin)
We investigate to what degree segregation and nationalism have economic causes. We propose a mechanism through which a decline in the relative price of agricultural staples, a common feature of economic development, causes rural producers to switch to the production of more capital-intensive goods. To finance this production switch, producers pool capital in local clubs, such as cooperatives. Segregated clubs then become attractive in the presence of communication costs between ethnic groups. Additionally, majority ethnicities may have an incentive to use nationalism as a barrier to club membership by the minority ethnicity. This incentive is stronger if ethnic heterogeneity coincides with economic inequality. We show how this pattern offers a historically plausible explanation for the rise of grassroots nationalism and segregation in Europe before the First World War. This theory is econometrically supported by evidence on ethnic segregation and national conflict in Prussian Poland. The results explain why segregation and nationalism arose during a historical period marked by increasing market integration and economic growth.
Colonial Fiscal Institutions in Africa: How they persisted, when they changed, and why (with Thilo Albers, LSE)
We investigate the impact of colonial taxation systems on fiscal capacity in post-independence Africa. We use a new data set of interwar tax revenues covering the whole of the African continent. Although our results show a strong legacy of colonial taxation in the first decade after independence, the effect fades rapidly. Instead, we document a reversal: African states with initially high fiscal capacity became weaker, whereas initially weak states were relatively successful in developing their capacity. Overall, however, growth in African fiscal capacity post-independence has been relatively slow. We show how this may tentatively be explained by the receipt of aid, resource dependence, and the incidence of IMF loans.
WORK IN PROGRESS
The Fiscal State in Africa: State Capacity and Development in the Long Run, 1890-2010 (with Thilo Albers, LSE and Morten Jerven, NMBU)
Resources, Revenue Volatility and Regime Stability over One Century (with Thilo Albers, LSE)
The Economic Geography of Late Industrialization: Local Finance, Markets and the Cost of Distance in Imperial Russia (with Theocharis N. Grigoriadis, FU Berlin)
The Political Economy of Brain Drain (with Theocharis N. Grigoriadis, FU Berlin and Dimitry Veselov, HSE Moscow)
How to Write a Financial Crisis: Media Coverage and the Effect of Financial News (with Fabian Hungerland, Berenberg Bank)