Use It or Lose It: Adverse Possession and Economic Development
Itzchak Tzachi Raz (Harvard University)

Abstract : The legal doctrine of adverse possession limits the security of property rights by transferring formal land titles from absentee owners who leave their land idle to adverse possessors that use the land. This paper exploits historical changes in adverse possession legislation in U.S. states between 1840-1920 to investigate the causal effects of the security of land titles. I find that a reduction in the security of titles increased agricultural output. The main channel is incentivizing higher land utilization. A reduction in the security of land right is also associated with an increase of investment in farms and improved access to capital markets, as well as with an increase in the share of owner-cultivated farms and mid-size farms. These findings suggest that the effect of property rights on economic development is not monotonic, and that property rights may be over secure.

Rulers, Religion, and Riches: Why the West Got Rich and the Middle East Did Not
Jared Rubin (Chapman University)

Abstract : For centuries following the spread of Islam, the Middle East was far ahead of Europe. Yet, the modern economy was born in Europe. Why was it not born in the Middle East? This book examines the role that Islam played in this reversal of fortunes. It argues that the religion itself is not to blame; the importance of religious legitimacy in Middle Eastern politics was the primary culprit. Muslim religious authorities were given an important seat at the political bargaining table, which they used to block important advancements such as the printing press and lending at interest. In Europe, however, the Church played a weaker role in legitimating rule, especially where Protestantism spread (indeed, the Reformation was successful due to the spread of printing, which was blocked in the Middle East). It was precisely in those Protestant nations, especially England and the Dutch Republic, where the modern economy was born. In both of those nations, the Church was replaced with the economic elite in parliaments at the political bargaining table. These elites had interests more aligned with laws and policies that portend economic success, and long-run economic growth resulted. Such changes did not occur in Spain or the Ottoman Empire, and they suffered economic stagnation that persisted for centuries as a result.

Taxing Unwanted Populations: Fiscal Policy and Conversions in Early Islam
Mohamed Saleh (Toulouse School of Economics)
Jean Tirole (Toulouse School of Economics)

Abstract : Hostility towards a population, whether on religious, ethnic, cultural or socioeconomic grounds, confronts rulers with a trade-off between taking advantage of population members' eagerness to maintain their identity and inducing them to "comply" (conversion, quit, exodus or any other way of pleasing the hostile rulers). This paper first analyzes the rulers' optimal mix of discriminatory and non-discriminatory taxation, both in a static and an evolving environment. It thereby derives a set of unconventional predictions. The paper then tests the theory in the context of Egypt's conversion to Islam after 641 using novel data sources. The evidence is broadly consistent with the theoretical predictions.