Does EU funding affect local state capacity in recipient countries? Local state capacity is an important indicator of self-governance and a key component of democratization processes. In this study, we focus on two specific types of state capacity, namely (1) the ability to provide information to third parties and (2) to discriminate between different kinds of third-party inquiries. Because the European Union's structural funds are distributed through a competitive mechanism and incentivize expansions in administrative personnel, our theory predicts that high levels of EU funding may bring about a higher bureaucratic capacity equilibrium. We assess our theoretical argument by analyzing the effect of EU structural funds on building local government capacity in the largest recipient country, post-communist Poland. Through a randomized survey with more than 2,400 municipal administrations in Poland, we find that local administrations which have benefited more from EU funding, have developed higher levels of discrimination capacity. At the same time, we do not find sufficient evidence for increases in information provision capacity.
From Feudalism to Populism: Evidence from Poland
What explains the support for populism? During early industrialization, the path of industrialization, as reflected in advances in transportation technology, has determined the spatial pattern of urbanization which through path dependence persistently shapes contemporary economic fortunes. We argue that geographies where urbanization was concentrated in fewer and relatively more populous urban centers will be conducive to a high level of inequality in access to economic opportunities, and that resentment over the resulting relative deprivation generates demand for populism. We test our theory empirically by looking at the case of Poland, and using an original dataset find evidence that differences in the extent of the construction of railways between and within Austrian, Russian and German empires pursued in what is now Poland have persistently shaped the distribution of economic fortunes in space and explain the spatial distribution of support for the populist Law and Justice.
Turning Burghers into Peasants: Political Economy of City Status in Congress Poland
For the past 1000 years, European towns received administrative or charter grants of a ’city status’ that made them into jurisdictions separate from the countryside. I argue that this unique development has contributed to the growth of European cities by privileging urban at the expense of landed elites, generating positive spillover effects for the whole town. I collect original city-level data to draw on evidence from a natural quasi-experiment in Congress Poland where an 1869 reform of Tsar Alexander II deprived three quarters of the existing 452 cities of their city status. I show that degraded cities experienced a 64 percentage points slower population growth over the next 40 years. I explore the mechanisms and show that city status was associated with more public goods provision and a more effective judiciary, and contributed to more industrialization in towns that remained cities and a relative agrarianization of degraded cities. I discuss implications for our understanding of the role of inclusive institutions in promoting development.