Working Paper No. 1172

The Political Economics of Growth, Labor Control and Coercion: Evidence from a Suffrage Reform

Published: June 20, 2017, revised September 24, 2019Pages: 75Keywords: Economic development and growth; Political institutions; Technological change; Industrialization; Labor coercion; Labor-saving technologies; Persistence of extractive economic and political institutionsJEL-codes: E22; E23; E24; E62; F15; H41; H52; H53; H70; J10; J21; J22; J23; J24; J31; J32; J41; J43; J47; N10; N33; N53; N63; N73; N93; O10; O14; O15; O18; O33; O40; O52; R10; R42

The Political Economics of Growth, Labor Control and Coercion: Evidence from a Suffrage Reform Erik Lindgren, Per Pettersson-Lidbom and Björn Tyrefors


In this paper, we analyze how a suffrage reform in 1862/63 that shifted the de jure distribution of political power from landowners to industrialists affected Sweden’s industrialization and economic and social development from the 1860s to the 1910s.

Using a newly constructed, comprehensive historical data set of the universe of approximately 2,400 Swedish local governments, we document that the change in suffrage affected a very large number of development and social outcomes at the local level, such as labor coercion, factor price manipulation in the form of entry barriers including investments in local public goods (i.e., schooling) and transportation (i.e., local railways), the real wage structure, technology adoption in both agriculture and industry, labor productivity in both agriculture and industry, changes in the composition of employment and the structure of production, demographic transition, organized labor, and persistence in dysfunctional local political institutions.

Our findings are consistent with the idea that political institutions are a key determinant of long-run development and growth. Specifically, our results suggest that politically powerful landowners can block economic development using labor coercion and factor price manipulation, i.e., using entry barriers and other distortionary policies.​

Björn Tyrefors

Contact

Ph: +46 8 665 4521
bjorn.tyrefors@ifn.se

Per Pettersson-Lidbom

Contact

Ph: +46 8 16 12 39
pp@ne.su.se

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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