Giving Away an Empire: Corrdination of Railroads and Homesteaders Through Incentives

Abstract : In 1862 the U.S. federal government passed the first of several transcontinental railroad land grant acts and the Homestead Act. Each gave away massive amounts of federal lands, created incentives for early railroad construction and early settlement, and dissipated some of the value of the lands given away. Here it is argued that the state used the private incentives created by these legislative acts to coordinate the actions of private railroads and settlers in order to establish meaningful de facto ownership over the entire frontier through occupation. That is, first possession of land was used to align the incentives of the railroads and settlers with the desire of the state. This paper examines the tenuous U.S. sovereignty in the West, the institutional details of the railroad land grants, and --- using new digitized homesteading patent records --- the relationship between railroads, homesteads, and cash sales in three states (Kansas, Nebraska, and South Dakota), to test the theory that ``giving away an empire'' was a second-best strategy to gain control over the West.

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Land Ownership and Delay in Oil and Gas Production: a Natural Experiment

Abstract : We examine oil and gas drilling on federal, state, and private lands in the Wyoming checkerboard by comparing permitting delays and price responsiveness. These lands were alternatively allocated to private owners at the square-mile section via the Pacific Railroad Acts between 1862 and 1871, and two of every 36 sections, numbers 16 and 36, to state governments under the General Land Ordinance of 1785. Prior to 1970, we find all three types of lands see similar delays in the time from permit submission to first drilling. However, from 1970 onwards, and especially as a result of the shale boom after 2003, well drilling on federal and to a lesser extent state land is delayed relative to wells on private land. The results suggest that bureaucratic delay has a significant effect on whether a well is drilled: post-2003 around 37% of federal wells that receive permits are never drilled versus only 17% for private wells. To test how this delay affects production, we examine the price elasticity of drilling, finding evidence that drilling on private land is more price-responsive: average drilling elasticities for gas wells in the checkerboard are around 0.78, but when separated by land type, drilling on private land is more responsive to price.

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Endogenously Determined Versus Exogenously Imposed Institutions: the Case of Tyranny in Ancient Greece

Abstract : For empirical research on the effects of institutions, an important question is whether a given institutional type will generate different outcomes depending on the circumstances in which it arises. In this paper, we examine a unique historical episode in which a specific type of institution – rule by a tyrant – arose in a similar set of states, yet in differing circumstances, with the impetus for establishment coming from local support in some cases and through external influence in others. Over the course of the sixth century BCE, a substantial subset of Greek poleis (city-states) experienced a period of tyranny. In some cases, the tyrant came to power with the support of local elites, yet in other cases, the tyrant was imposed by a conquering power, Persia. Although it is likely that the tyrants’ proponents – whether local elites or Persian rulers – sought to increase stability and maintain policies necessary for wealth creation, the long run effects of tyranny differed: In poleis where the rise of a tyrant would have depended on local support, a record of tyranny predicts a greater propensity for subsequent development of democracy. By contrast, in poleis where the rise of a tyrant would have depended on Persian support, a record of tyranny has a weak (and perhaps negative) association with subsequent development of democracy. These findings illustrate both the importance of the institutional path and the difficulty in transplanting institutions.

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Negative Shocks and Mass Persecutions: Evidence from the Black Death

Abstract : In this paper we study the Black Death persecutions (1347-1352) against Jews in order to shed light on the factors determining when a minority group will face persecution. We develop a theoretical framework which predicts that negative shocks increase the likelihood that minorities are scapegoated and persecuted. By contrast, as the shocks become more severe, persecution probability may actually decrease if there are eco- nomic complementarities between the majority and minority groups. We compile city- level data on Black Death mortality and Jewish persecution. At an aggregate level we find that scapegoating led to an increase in the baseline probability of a persecution. However, at the city-level, locations which experienced higher plague mortality rates were less likely to engage in persecutions. Furthermore, persecutions were more likely in cities with a history of antisemitism (consistent with scapegoating) and less likely in cities where Jews played an important economic role (consistent with inter-group complementarities).

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