The Consequences of Radical Reform: The French Revolution Daron Acemoglu, Davide Cantoni, Simon Johnson, and James A. Robinson∗ July 8, 2010 Abstract The French Revolution had a momentous impact on neighboring countries. It removed the legal and economic barriers protecting oligarchies, established the principle of equality before the law, and prepared economies for the new industrial opportunities of the second half of the 19th century. We present within-Germany evidence on the long-run implications of these institutional reforms. There is no evidence of a negative effect of French invasion: occupied areas experienced more rapid urbanization growth, especially after 1850. A two-stage least squares strategy provides evidence consistent with the hypothesis that the reforms instigated by the French had a positive impact on growth. JEL: I10, O40, J11. Keywords: institutions, civil code, guilds, oligarchy, political economy. In this paper we exploit the variation in institutional reform created by the French Revolution in Europe, in particular within Germany, to investigate the consequences of radical, externally- imposed reforms on subsequent economic growth. After 1792 French armies occupied and re- formed the institutions of many European countries. The set of reforms the French imposed in the territories that they conquered were extensive and radical; they included the imposition of the civil legal code, the abolition of guilds and the remnants of feudalism, the introduction of equality before the law, and the undermining of aristocratic privileges. The long-run implications of these reforms ∗Acemoglu: Department of Economics, Massachusetts Institute of Technology, 50 Memorial Drive, Cambridge, MA 02139 (e-mail:
[email protected]). Cantoni: Departament d’Economia i Empresa, Universitat Pompeu Fabra, Ra- mon Trias Fargas, 25–27, 08005 Barcelona, Spain (e-mail:
[email protected]).