Source: Dennis Jarvis from Halifax, Canada [CC BY-SA 2.0 (Wikimedia commons)

In a contribution to the inaugural issue of the American Economic Journal – Macroeconomics, economists Torsten Persson of Stockholm University and Guido Tabellini of Bocconi University, in Milan, coined the term “democratic capital” to represent the stock of influence of the concept of political democracy resulting from a country’s accumulated experience of democracy and its exposure to democracies in its own and perhaps other parts of the world. The two authors theorized that countries with more democratic capital would be more likely to establish a democracy, if they were not currently in one, and less likely to transition to dictatorship or authoritarianism because more of their citizens would be ready to put up resistance to the removal of democratic rights. Using historical data for up to 180 years leading up to the year 2000, for about 150 countries, they found considerable support for this idea.

It now seems entirely reasonable to assume that in regions like Western Europe, it has become increasingly unlikely over the past few decades that any one country would suddenly revert to dictatorship. We would be far more surprised to see Belgium suddenly ruled by a dictator next year, while still surrounded by democratic neighbors, than we are surprised by signs of democratic slippage in Hungary or Turkey. But there’s additional and growing evidence that past practice of relatively democratic institutions has had very long-lasting effects on people, and on much finer geographic scales.

In 2016, Luigi Guiso, Paola Sapienza and Luigi Zingales published a paper in the Journal of the European Economic Association in which they provided a considerable body of evidence indicating that towns and cities of northern Italy that were governed as free city-states during the twelfth through fourteenth centuries have more non-profit organizations per capita, more presence of organ donation institutions, and less cheating by students on math tests, today.

A similar and perhaps even more striking finding is being reported now by Devesh Rustagi, a young Zurich-trained economist who works on issues of economic development and institutions using a variety of research methods. Though Rustagi’s Ph.D. research focused on cooperative relations among sustainable forest groups in rural Ethiopia, he became interested in the democratic traditions that are relatively long but also quite varied in duration and detail across localities in Switzerland, where he earned his degree. He used an online research platform to recruit several hundred research participants from French- and German-speaking parts of the country and had them engage in two-person interactions with anonymous counterparts in a dilemma game with monetary payoffs riding on own and counterparts’ decisions. The game played was the public goods or voluntary contribution game described in previous posts, where each player divides a set of tokens between a private and a group account, each earns more for any matching set of actions when more is contributed by both to their group account, and each earns most when the other contributes fully to that account while she herself contributes nothing. In addition to deciding how many tokens to put in the group account unconditionally, Rustagi asked each respondent to decide how many tokens she would contribute conditional on what the other put in. As explained to them, one of the two players would be randomly selected to have this conditional decision be implemented while the other’s implemented decision would be his or her unconditional one. As in the original version of this game by Fischbacher, ächter and Fehr (2001), the conditional decisions allow the researcher to classify the decision-maker’s disposition towards —e.g., those who decide to contribute more to the joint account the more that the other contributes are called “conditional cooperators.” Although they would earn more money by contributing nothing, these players act as if they feel better about themselves if they join their counterpart in an act of mutual cooperation. Such individuals have been found to be the most numerous type in a spate of studies, but individuals who contribute nothing regardless of what the counterpart does—dubbed free riders—are also found, as are one or two other types, along with a certain proportion of subjects whose decisions display no clear pattern.

Rustagi collected enough information from his participants to determine what part of Switzerland they were from and to control for things like , occupation and income. Among the factors that correlated strongly with the likelihood that an individual displayed conditional cooperation in the voluntary contribution game was the duration of historical democracy in the municipality the individual was born in. Some rural cantons had established open-air assemblies in which eligible male residents voted as early as the 14th century. Some cities had expanded the ranks of those with a voice in choosing their city councils at similarly early points in time. In contrast, more democratic forms did not emerge in other localities until Napoleon’s invasion of Switzerland in 1798, culminating in the issuance of the Act of Mediation which required local self-governance throughout the country. The more self-governing and the less self-governing localities were interspersed over the areas from which the participants were drawn.

Can one conclude from the strong correlation between the duration of local self-governance and the inclination to cooperate that the historical practice of citizens' voices had created more cooperative citizens? Not really, given that the opposite direction of causation—that more cooperatively inclined populations had been more insistent on self-rule, or better able to collectively organize to secure it, earlier in history—is equally plausible. However, Rustagi found a clever way to make a strong case in favor of the direction of causation running from historical democracy to cooperation. He identified about ninety municipalities that had become self-governing in the 13th and 14th centuries due to a historical accident independent of any characteristics of the people who resided in them. Both these and neighboring localities had been under the ultimate rule of the Holy Roman Empire, in those times, with proximate rule by a variety of noble houses that were recognized by the empire and swore formal allegiance to it. When the last male head of a noble house called Zaehringen which had governed hundreds of today’s Swiss municipalities died without an heir in 1218, the Holy Roman Emperor granted permitted some of the house’s lands in Switzerland “imperial immediacy,” meaning rule by a local council directly under the Empire, rather than rule by noble intermediaries. While not approaching universal adult suffrage by modern standards, the change constituted a considerable step towards autonomy for large groups of land-owning, merchant, and other men of modest status. The pockets of land formerly under the Zaehringen began developing more democratic forms of local government more than five centuries before the forced imposition of democratizing changes by Napoleon.

Using Zaehringen rule at the time of that house’s extinction as a trigger for early democracy, while controlling for a host of geographic and other factors that might also be affecting cooperation in his online experiment sample, Rustagi found it to be a highly statistically significant predictor of who makes conditionally cooperative choices today. (In econometric parlance, rule by the Zaehringen serves as an “instrument” for early self-rule.) Thus, the clearly accidental fact that one’s ancestral locality began transitioning towards democracy centuries earlier than neighboring localities appears to play a causal role in cooperative behavior today.

Given the time spans entailed, the findings of Rustagi, like those of Guiso, Sapienza and Zingales, suggest even more strongly than those of Persson and Tabellini that practice of democracy has a way of “getting under the skin.” This just might offer some hope to those of us who worry that the experiment with full-blown democracy that marked so many countries in the late 20th Century, may be running out of steam. It’s true that countries including the United States, Britain, and France can be argued to be showing a bit less fragility of democracy, so far, than relative newcomers to the institution such as Hungary, Turkey and Poland. But in all three of the oldest democracies, there are reasons for alarm about political polarization, legislative dysfunction, and willingness by some groups to side-step constitutional checks and balances to impose desired outcomes or hold back changes opposed by large but non-majority segments of their populations. The research just discussed leads to hope that our recent centuries of deepening democratic experience may contribute to a benign resolution of the current crisis, but we lack the luxury of hindsight that the studies discussed have exploited with such finesse.