Education and Military Rivalry

NBER WORKING PAPER SERIES

EDUCATION AND MILITARY RIVALRY

Philippe Aghion Torsten Persson Dorothee Rouzet

Working Paper 18049 http://www.nber.org/papers/w18049

NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 May 2012

We thank Xavier Jaravel for superb research assistance. We are also grateful to Tim Besley, Nick Bloom, Jim Fearon, Claudia Goldin, Elhanan Helpman, Kalina Manova, Nathan Nunn, and Francesco Trebbi for help and suggestions, and to seminar participants at Harvard, Brown, Stanford GSB, and the Canadian Institute for Advanced Research (CIFAR) program meeting for useful comments. Financial support from the ERC and the Torsten and Ragnar Söcerberg Foundations is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

NBER working papers are circulated for discussion and comment purposes. They have not been peer- reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

© 2012 by Philippe Aghion, Torsten Persson, and Dorothee Rouzet. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Education and Military Rivalry Philippe Aghion, Torsten Persson, and Dorothee Rouzet NBER Working Paper No. 18049 May 2012 JEL No. D70,E24,F52,I20,N30,O10

ABSTRACT

Using data from the last 150 years in a small set of countries, and from the postwar period in a large set of countries, we show that large investments in state primary education systems tend to occur when countries face military rivals or threats from their neighbors. By contrast, we find that democratic transitions are negatively associated with education investments, while the presence of democratic political institutions magnifies the positive effect of military rivalries. These empirical results are robust to a number of statistical concerns and continue to hold when we instrument military rivalries with commodity prices or rivalries in a certain country’s immediate neighborhood. We also present historical case studies, as well as a simple model, that are consistent with the econometric evidence.

Philippe Aghion Dorothee Rouzet Department of Economics Department of Economics Harvard University Harvard University 1805 Cambridge St 1805 Cambridge St Cambridge, MA 02138 Cambridge, MA 02138 and NBER [email protected] [email protected]

Torsten Persson Institute for International Economic Studies Stockholm University SE-106 91 Stockholm SWEDEN and NBER [email protected]

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., Education reform period Rivalries and wars starting in a 20-year Country Availability of data on primary enrollment rate (20-year period with greatest increase Date of democractic transition (*) period before education reform (**) in primary enrollment) Second Afghan Anti-Reform War of 1928-1937 (intra-state) Strategic rivalry with Iran, 1816-1929 Afghanistan 1946-1998 1946-1966 Always < 6 Strategic rivalry with Pakistan, 1947–1979 Second World War of 1939-1945 Strategic rivalry with Greece, 1913-1987 Albania 1919-1998 1934-1954 2002 First World War of 1914-1918 Lopez War of 1864-1870 Fourth Argentina War of 1870-1871 (intra state) Argentina 1882-1998 1889-1919 1983 Fifth Argentina War of 1874 (intra state) Argentine Indians War of 1879-1880 (intra state) Belgium 1860-1980 1889-1919 1853 None War of the Pacific of 1879-1883 Bolivia 1882-1981 1882-1902 1982 Bolivia-Criollos War of 1870-1871 (intra state war) Brazil 1868-1981 1946-1966 1985 Second World War of 1939-1945 Bosnia and Bulgaria Revolt of 1875-1876 (intra state war) Serbian-Bulgarian War of 1885 Strategic rivalry with Greece 1878-1953 Bulgaria 1889-1985 1889-1909 1990 Strategic rivalry with Romania 1878-1945 Strategic rivalry with Turkey 1878-1950 Strategic rivalry with Yugoslavia 1878-1954 Canada 1865-1980 1946-1966 1888 Second World War of 1939-1945

Chile 1882-1980 1893-1913 1965 War of the Pacific of 1879-1883

Manchurian War of 1929 Intra-Guomindang War of 1929-1930 (intra state war) China 1919-1998 1938-1958 Always < 6 Second Sino-Japanese War of 1931- Third Sino-Japanese War of 1937-1941 Columbia 1886-1980 1893-1913 1867 None Costa Rica 1882-1980 1946-1966 1875 Second World War of 1939-1945

Cuba 1902-1980 1954-1974 Always < 6 Second World War of 1939-1945

Czechoslovakia 1919-1992 1943-1963 > 6 in 1918 No data Denmark 1882-1980 1882-1902 1911 Second Schleswig-Holstein War of 1864 Dominican Republic 1865-1980 1900-1920 1978 None in dataset Ecuador 1886-1980 1946-1966 1979 Second World War of 1939-1945 Finland 1919-1980 1919-1939 > 6 in 1918 Kinship Wars from 1918-1920 France 1815-1981 1827-1847 1876 Franco-Spanish War of 1823 Germany 1867-1939 1867-1887 1919 Second Schleswig-Holstein War of 1864 Greco-Turkish War of 1897 Greece 1860-1980 1913-1933 1864 First Balkan War of 1912-1913 Guatemala 1882-1980 1947-1967 1996 Second World War of 1939-1945 Haiti 1905-1981 1907-1927 1990 Strategic Rivalry with the United States 1891–1915 Honduras 1882-1980 1946-1966 1982 Second World War of 1939-1945 First World War of 1914-1918 Hungary 1919-1980 1926-1946 1990 Hungarian Adversaries War of 1919 Iran 1889-1980 1889-1909 Always < 6 None

(*) The democratic transition is identified as the first year in which the PolityIV index reached 6. (when the PolityIV index is greater than 6 at the beginning of the PolityIV sample, the cell indicates: >6 in beginning date of sample )

(**) Wars are identified from the Correlates of War database; strategic rivalries are identified from Thompson (2001). Education reform period Rivalries and wars starting in a 20-year Country Availability of data on primary enrollment rate (20-year period with greatest increase Date of democractic transition (*) period before education reform (**) in primary enrollment) Ireland 1922-1980 1946-1966 Above 6 in 1922 Second World War of 1939-1945 Italy 1882-1980 1889-1919 1947 First Italian-Ethiopian War of 1887 Convention of Kanagawa of 1854 (with US) Anglo-Japanese Friendship Treaty of 1854 Japan 1867-1998 1867-1887 1952 Treaty of Shimoda of 1855 (with Russia) United-States Japan Treat of Amity and Commerce of 1858 Treaty of Amity and Commerce between France and Japan of 1858 Liberia 1887-1980 1946-1966 2006 Second World War of 1939-1945 Luxemburg 1886-1981 1926-1946 No data First World War of 1914-1918 Third Mexican War of 1910-1914 Mexico 1882-1980 1919-1939 1997 First World War of 1914-1918 Mongolia 1926-1980 1930-1950 1992 Conquest of Mongolia of 1920-1921 Netherlands 1857-1980 1899-1919 1917 First Dutch-Achinese War of 1873-1878

New Zealand 1907-1980 1946-1966 Above 6 in 1907 Second World War of 1939-1945

Nicaragua 1902-1980 1939-1959 1990 No data Second World War of 1939-1945 Norway 1830-1981 1960-1980 1898 Enduring rivalry with Russia 1956–1987 Panama seceded from Colombia with the Panama 1903-1980 1906-1926 1989 backing of the United States in 1903

Paraguay 1882-1980 1882-1902 1992 Lopez War of 1864-1870

Peru 1886-1980 1930-1950 1980 First World War of 1914-1918 Poland 1919-1980 1946-1966 Above 6 in 1918 Second World War of 1939-1945 Portugal 1854-1980 1854-1874 1911 No data Romania 1882-1980 1893-1913 1996 None Second Spanish-Moroccan War of 1909-1910 Spain 1859-1980 1919-1939 1900 First World War of 1914-1918 Sweden 1882-1980 1939-1959 1914 None Switzerland 1880-1982 1939-1959 Above 10 in 1880 No Thailand 1887-1980 1919-1939 1992 First World War of 1914-1918 Turkey 1886-1980 1886-1906 1960 Second Russo-Turkish War of 1877-1878 Second British-Burmese War of 1852 Crimean War of 1853-1856 United Kingdom 1860-1980 1860-1880 1880 Anglo-Persian War of 1856-1857 Indian Mutiny of 1857-1859 United States 1825-1982 1860-1880 1809 Mexican-American War of 1846-1847 Uruguay 1882-1980 1946-1966 1952 Second World War of 1939-1945 Venezuela 1886-1980 1919-1939 1958 First World War of 1914-1939 Yugoslavia 1919-1980 1930-1950 2000 First World War of 1914-1939

(**) Wars are identified from the Correlates of War database; strategic rivalries are identified from Thompson (2001). < ( = * 7 -< (%

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FIGURE 1 Country Period External Threat New Policies Key Figures Outcome

1. Failure in the short run due to the opposition of the French 2. Substantial impact in the long run: 1. Reforms of curricula, teaching methods and teacher education - 16.8% of males born in Prussia before 1801 were completely illiterate, as against 9 2. Delegating power to local communities regarding administration and Wilhelm von Humboldt 2.9% for males born between 1837 and 1841 Prussia 1810s Defeat of Iena in 1806 3 funding of schools Baron vom Stein - starting in the 1810s, literacy rates gradually increased and reached 85% in 1850 3. Foundation of Berlin University - Prussia became the leader for primary enrollment until the 1880s 4 - schools remained funded primarily by local taxes throughout the XIXth century 4 3. Primary school enrollment per 10,000 people: 1131 in 1815 vs. 1592 in 1850 5 **

1. Abolition of all fees and tuition charges in public elementary schools 4 1. France overtook Prussia as the leader for primary enrollment in the 1880s 2. Education is made compulsory until age 13 2. Literacy rates quickly increased from 80% in 1870 to 96% in 1912 6 3. Religious education in public school is forbidden France 1880s Franco-Prussian War of 1870 Jules Ferry 1 1 3. Increased sense of patriotism and unity 4. 17,320 new schools are built, 5,428 enlarged, 8,381 repaired 5 ** 5. The new curriculum promotes patriotism 4. Primary school enrollment per 10,000 people: 1176 in 1870 vs. 1430 in 1912

1. Strong popular resistance in early stages 2. Resounding success in a few decades: - Japan overtook most European powers in terms of primary enrollment, which 1. Introduction of modern science in the curriculum rose from 28.1% in 1873 to 98.1% in 1910 7 Mori Arinori Japan 1870s Risk of colonization by Western powers 2. Elementary education is made compulsory - from 1865 to 1910, the literacy rate increased from 35% to 75% for men and from Yamagata Aritomo 3. 25,000 new schools are built 2 8% to 68% for women 7 - traditionalists and progressives agreed on the curriculum planned by the 1890 Imperial Rescript 8 3. Primary school enrollment per 10,000 people: 65 in 1876 vs. 1122 in 1905 5 **

References 1. Weber, E (1979), Peasants into Frenchmen : The Modernization of Rural France, 1870-1914 , Chatto & Windus. 2. Burnett, J, and Wada, Y (2007), "The Ebb and Flow of Japanese Educational Reform", Australian Association for Research in Education . 3. Arnove, Robert F., and Harvey J. Graff (2008), National Literacy Campaigns and Movements: Historical and Comparative Perspectives , Transaction Publishers. 4. Lindert, P (2004), Growing Public : Social Spending and Economic Growth since The Eighteenth Century, Cambridge University Press. 5. CNTS Data Archive. 6. Morrisson, C, and Murtin, F (2009), "The Century of Education", PSE Working Paper n0.2008-22. 7. Taira, Koji (1971), "Education and literacy in Meiji Japan: An interpretation", Explorations in Economic History , vol. 8, issue 4, pages 371-394. 8. Duke, B (2009), The History of Modern Japanese Education: Constructing the National School System (1872-1890) , Rutgers University Press. 9. Block, Rainer (1995), Der Alphabetisierungsverlauf im Preussen des 19. Jahrhunderts: Quantitative Explorationen aus bildungshistorischer Perspektive , European University Studies (Series XI, Education). ** Note that, in the long run, primary school enrollment per capita depends on the primary school enrollment rate of new generations but also on the evolution of the demographic structure of the country.

FIGURE 2