Uwe Sunde

Critical junctures and economic development - evidence from the adoption of constitutions among American Indian nations

Year

Utilizing a novel data set on American Indian Nations, we investigate how conditions at critical junctures of development can have long-lasting economic effects. We investigate the effect of the party of the US President at the time when American Indian tribes adopt a written constitution for the first time. Our results indicate that there is a persistent effect on economic development, even after controlling for other important characteristics and conducting extensive robustness checks. We also find suggestive evidence for the constitutional design, and specifically whether the chief executive is elected directly or indirectly, being a likely channel through which the presidential party affects long-run economic development.

Resource Type
Citation

Akee, R., Jorgensen, M., & Sunde, U. (2015). Critical junctures and economic development - evidence from the adoption of constitutions among American Indian nationsJournal of Comparative Economics, 43(4), 844-861. doi: 10.1016/j.jce.2015.08.004.

Constitutions and Economic Development: Evidence from the American Indian Nations

Year

This paper presents an empirical examination of economic and institutional development. Utilizing a novel data set on American Indian tribal nations we investigate how constitutional design affects economic development, while holding the broader legal and political environment fixed. Instrumental variables regressions, using the party of the U.S. President at the time of the initial adoption of tribal constitutions as an instrument for constitutional design, indicate that parliamentary systems (versus presidential) have a strong positive effect on economic development, while ordinary least squares regressions of current economic outcomes on parliamentary systems of government show no effects. Robustness checks suggest that the results are not explained by differences in other institutions or geographic characteristics. Additional results provide some suggestive evidence that the effects may operate through channels that are typically associated with parliamentary systems, such as larger public employment, and more equitable income distribution.

Resource Type
Citation

Akee, Randall, Miriam Jorgensen and Uwe Sunde. "Constitutions and Economic Development: Evidence from the American Indian Nations." Institute for Study of Labor. Discussion Paper No. 6754. July 2012. Paper. (http://ftp.iza.org/dp6754.pdf, accessed October 5, 2012)