Social Capability, History and the Economies of Communist and Post-Communist States

It has been shown, for non-Communist developed and developing countries, that earlier development of agriculture, a dense population, and a state-level polity is associated with a higher income and more rapid economic growth in the late 20 Century. We investigate whether this was also the case for countries under Communism and for the same countries in transition to a market economy. Our findings are generally affirmative, with an interesting pattern for the Eurasian socialist core countries involving higher growth nearer their west European and east Asian poles. We also find that ethnic fractionalization, which is correlated with late premodern development, shows harmful effects in the transition era but not under Communism. JEL codes: P27, N10, O40