118 Pages Posted: 21 Oct 2016 Last revised: 31 Jan 2019

Date Written: December 8, 2018

Abstract

This paper explores the impact of autocratic rule on social capital -- defined as the attitudes, beliefs, norms, and perceptions that support cooperation. Political repression is a distinguishing characteristic of autocratic regimes. Between 1661-1788, individuals in imperial China were persecuted if they were suspected of holding subversive attitudes towards the state. A difference-in-differences approach suggests that in an average prefecture, exposure to political repression led to a decline of 38% in local charities -- a key proxy of social capital. In line with the historical panel results, individuals have lower levels of generalized trust today in affected prefectures. Taking advantage of institutional variation in 20th century China, and using two instrumental variables, we provide further evidence that political repression permanently reduced social capital. Moreover, individuals in prefectures with a legacy of literary inquisitions are more politically apathetic. More suggestively, there appears to be a self-reinforcing cycle in which autocratic rule becomes entrenched through causing a permanent decline in social capital.