03-titel-1 + bold Master of Occus 03-titel-4 As aliquia natum quo ea que quiae cum rorae. Building national Identity? The causal effect of homogenization policies in Alsace-Lorraine Sirus Dehdari & Kai Gehring CIS Working Paper No. 89 2016 Center for Comparative and International Studies (CIS) Building national identity? The causal effect of homogenization policies in Alsace-Lorraine∗ Sirus Dehdariy Kai Gehringz IIES, Stockholm University University of Zurich August 7, 2016 Abstract: We use a spatial regression discontinuity design to derive the causal effect of intrusive homogenization policies, first by the German and then by the French government, on national identity in Eastern France. Our identification strategy uses the historical division of Alsace and Lorraine by the Germans in 1870/71 as a natural experiment, which was quasi-exogenous due to disagreements in the German leadership on how far the new border should reach into France. Our results document persistently higher support in two crucial referenda on the European Union in the region that experienced more intrusive policies, which as we explain reveals a lower common national identity. The results remain stable and unaffected when focusing on a subsample, controlling for distance to major cities and neighbor countries, excluding historically German speaking municipalities and potential outliers, and choosing different bandwidths. This is the first causal evidence that a government's policy choices influence the development of a common national identity. Keywords: National identity, Homogenization policies, Alsace-Lorraine JEL: H77, F50, Z10 ∗We thank Alberto Alesina, Olivia Bertelli, Konrad Burchardi, Carles Boix, Eric Chaney, Melissa Dell, Axel Dreher, Vasilika Fouka, Boris Gershman, Nathan Lane, Horacio Larreguy, Andreas Madestam, Shom Mazumder, Pierre- Guillaume M´eon,Stelios Michalopolous, Per Petterson-Lidbom, Torsten Persson, James Robinson, David Str¨omberg, Jakob Svensson, Hans-Joachim Voth, Fabian Wahl, Fabrizio Zilibotti, and seminar/conference participants at the Silvaplana Workshop in Political Economy 2016, the SSES in Lugano 2016, AEL in Heidelberg 2016, ASWEDE in Gothenburg 2016, ETH Zurich, Hannover University, Harvard University, Heidelberg University, Mannheim University, the Politics and History Network at Princeton University 2016, the Royal Economic Society Junior Symposium in Brighton 2016, Stockholm University and the University of Freiburg for feedback and great suggestions. Excellent research assistance was provided by Janine Albiez, Max Huppertz, Eva Marti, Norah Schmidlin and Alfred Sutter. We thank Valerie Baldinger for proof-reading. [email protected] [email protected] 1 1 Introduction The emergence of secessionist movements all over Europe and the world clearly shows how important a common national identity is in developed and developing countries. The relative importance of regional compared to national identity and their (missing) alignment fuels separatism in regions as different as Catalonia, Belgium, and Scotland. Arbitrarily determined national borders and the associated lack of common national identity frequently lead to violent struggles for autonomy and deteriorates development in Africa or the Middle East (e.g., Michalopoulos and Papaioannou, 2016).1 At the same time, many other formerly autonomous duchies or kingdoms in, for example, Poland, Germany or France, do not exhibit any such separatist movements. We argue that the homogeniza- tion policies implemented when integrating new regions into existing nations can help to explain these differences. Alesina and Reich(2014) model the homogenization policies that states implement to build a national identity, understood as the set of common preferences, goals and values, which has to be strong enough to allow the imposition of functioning common policies and institutions.2 States can decide to use benevolent policies that take the interests of the area to be integrated into account or intrusive policies which simply impose the preferences of the central government. To the best of our knowledge, our paper is the first to present a well-identified test of the long-run causal effect of different sets of homogenization policies on establishing a common national identity. The relevant literature (e.g., Thaler, 2001 and Carrol, 2013) emphasizes that border regions and their populations are particularly well suited for the study of nation building and the creation of group identities. It is however difficult to assess the causal impact of homogenization policies, as the correct counterfactual is almost always impossible to identify due to a lack of variation in the status of the respective regions. Almost all border regions have a long-run history that distinguishes them from the rest of their respective nation in many dimensions. The Basque country, for example, clearly differs from the rest of Spain in many respects (e.g. income, see Chaney, 2014), which makes it difficult to identify specific causes and effects. We exploit the division of the two border regions Alsace and Lorraine located between France and Germany following the Franco-Prussian War in 1870-71 as a natural experiment to estimate the causal effects of implementing more intrusive homogenization policies in the treated area.3 Our approach uses a spatial regression discontinuity design (RDD) based on detailed municipal level 1 See, for example, Jega(2000) for the importance of identities in explaining the legitimacy problems many African states face when trying to establish and maintain economic and political institutions. 2 Alesina and Reich(2014) p.1) argue that already \[in 1880,] policies of homogenization were, in part, motivated by concerns of secession" and have the goal to develop a common identity. As an example, the historian Joseph Strayer describes the (apparently successful) efforts of France's soft homogenization policies. He notes that \the Languedoc seemed very much like Catalonia and very unlike north France, yet it finally became thoroughly French" (Weber 1979, p.100). There are also many more recent examples which demonstrate the continued relevance of such policies today. Demirtepe and Bozbey(2012) describes the Chinese rather intrusive assimilation policies towards the Uyghur minority. The main argument brought forward to support these policies is that the Uyghur identity is a threat to the social and political order in China. 3 Examples of different homogenization policies can be found in Aspachs-Bracons et al.(2008); Ortega and Tanger˚as (2008) and Fouka(2014). 1 data. The main proxy for common national identity builds on arguments in Chacha(2013) and Jolly(2007). They argue that lower national identity makes more integration into the EU more desirable, as it decreases the perceived costs of delegating competences from the nation state to a superordinate institution. We use a simple probabilistic voting model to formalize these arguments based on existing politico-economic theory. Our theoretical framework demonstrates why voting in favor of more EU integration reveals a lower common national identity. The two main channels are that regions perceive themselves as gaining more autonomy in the EU (Van Houten, 2007; Jolly, 2007) and that the additional costs of further delegation from the nation state to the EU are lower if regional preferences deviate more strongly from national preferences. This view is supported by the fact that \regionalist political parties are consistently pro-EU across time, space, and issue area" (Jolly, 2007 p.1).4 We use detailed data on voting outcomes for two crucial referenda about the European Union in France in 1992 and 2005 to compare whether common national identity is lower in the treated than in the untreated areas. For the correct understanding and implementation of our approach it is important to distinguish between nationalism or regionalism per se, and our definition of national identity as the set of common preferences, goals and values. More specifically, while nationalism and regionalism can each be weak or strong, our definition of common national identity is solely based on the degree to which homogenization policies succeeded in aligning the preferences and values of citizens. We use the vote share for the presidential candidate of the Front National (National Front), Jean-Marie Le Pen, as a proxy for nationalist tendencies. Moreover, we use tests for discontinuities in voter turnout to examine whether satisfaction with democracy and political participation differs between treated and control area. Our preferred specification compares municipalities within a formerly homogenous area, which assures a comparable treatment and control group. This is important as the literature has shown that the extent to which intrusive policies foster regionalist tendencies depends on the political and institutional circumstances (Besley and Reynal-Querol, 2014; Van Houten, 2007). The region we consider is well-suited for this kind of analysis as both Alsace and Lorraine had been integrated into France for more than a century in 1870. After the Franco-Prussian war (July 19, 1870 - May 10, 1871), the conclusion of the peace treaty (Frankfurt, May 10, 1871) included the annexation of most of Alsace and parts of Lorraine by the victorious Germans. The annexed part of the region, to which we refer as Alsace-Lorraine (AL) or the treated area in the rest of the paper, remained German for nearly 50 years, until it became French again after World War I (WWI). As we argue, this region was