European regions with higher pre-industrial climatic variability display higher levels of trust today: Climatic risk favored the early adoption of inclusive institutions (which implies higher quality of local governments today)

Climate Risk, Cooperation, and the Co-Evolution of Culture and Institutions. Johannes C Buggle, Ruben Durante. The Economic Journal, ueaa127, January 20 2021, https://doi.org/10.1093/ej/ueaa127

Abstract: This paper examines the relationship between economic risk and the evolution of social cooperation. We hypothesize that trust developed in pre-industrial times as a result of experiences of cooperation aimed at coping with climatic risk. We document that European regions with higher pre-industrial climatic variability display higher levels of trust today. This effect is driven by variability in the growing season months and is more pronounced in agricultural regions. Regarding possible mechanisms, our results indicate that climatic risk favored inter-community exchange and the early adoption of inclusive political institutions which is associated with higher quality of local governments today.

JEL N53 - Europe: Pre-1913O11 - Macroeconomic Analyses of Economic DevelopmentO13 - Agriculture; Natural Resources; Energy; Environment; Other Primary ProductsQ54 - Climate; Natural Disasters; Global WarmingZ10 - General