Eren Arbatli Presented the Report on 'Minorities and Long-run Development: Persistence of Armenian and Greek Influence in Turkey'

On May 31 a research seminar on political economy took place at HSE. Eren Arbatli (HSE) spoke on 'Minorities and Long-run Development: Persistence of Armenian and Greek Influence in Turkey'.

Abstract:

Mass deportations and killings of Ottoman Armenians during WWI and the Greece-Turkey population exchange after the Greco-Turkish War of 1919-1922 were the two major events that marked the end of centuries-long coexistence of the Muslim populations with the two largest Christian communities of the Ottoman Empire. These communities played a dominant role in craftsmanship, manufacturing, commerce and trade across the Empire. In this paper, we empirically investigate their legacy on local development in modern Turkey. We show that, even after controlling for historical population density prior to or in the aftermath of the expulsions, districts with greater presence of Greek and Armenian minorities at the end of the 19th century are systematically more densely populated, more urbanized and are more lit up today. These results are robust to accounting for an extensive set of geographical and historical factors that might have influenced long-run development on the one hand and minority settlement patterns on the other. Instrumental variables and matching type estimators produce qualitatively similar results, suggesting that the correlations we uncover likely reflect a causal effect. We explore two potential channels of persistence: Armenian and Greek contribution to human capital accumulation at the local level and the role minority assets played in capital accumulation. Our paper not only offers the first systematic evidence for the commonly held view that Armenians and Greeks laid the foundations of modern economic development in Turkey, but it also offers a stark example of historical persistence of initial conditions in the face of large scale shocks to human capital.