Read on Twitter
Why is Finland today an equal country? Is it something inherent to the Nordic culture, or is it a result of more recent institutional changes?
We have something to say in our new paper The Violent Origins of Finnish Equality w/ @mitrunen & @virkola. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3741493
1/N
We have something to say in our new paper The Violent Origins of Finnish Equality w/ @mitrunen & @virkola. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3741493
1/N
Finnish inequality was considerable until a civil conflict the country experienced in 1918. We find that:
(i) inequality and other grievances led to insurgent activity.
(ii) municipalities with more insurgents had a more sizable shift toward equality after the civil war.
2/N
(i) inequality and other grievances led to insurgent activity.
(ii) municipalities with more insurgents had a more sizable shift toward equality after the civil war.
2/N
These two results are illustrated in the figure below.
Economic inequality in the early 1900s correlates positively with insurgency participation in 1918 (Panel A), and post-civil war change in inequality correlates negatively with insurgency (Panel B).
3/N
Economic inequality in the early 1900s correlates positively with insurgency participation in 1918 (Panel A), and post-civil war change in inequality correlates negatively with insurgency (Panel B).
3/N
We show that one reason for the high inequality was a famine shock that Finland experienced during the years 1866-1868.
Farms of heavily indebted farmers were foreclosed, and landownership became more concentrated, leading to land and income inequality.
4/N
Farms of heavily indebted farmers were foreclosed, and landownership became more concentrated, leading to land and income inequality.
4/N
There was less agricultural labor (~8% of the population died), but instead of paying higher wages, powerful landowners favored coercive tenant farming.
This was possible due to geographical mobility restrictions and lack of outside opportunities for agricultural workers.
5/N
This was possible due to geographical mobility restrictions and lack of outside opportunities for agricultural workers.
5/N
We find that the practice became more common in places hit harder by the famine. Monetary compensation paid to agricultural workers was also negatively affected. This further boosted economic inequality.
6/N
6/N
Economic inequality directly meant political inequality. Voting rights in local elections were tied to the amount of taxes that a voter paid.
People who paid more taxes also got to cast more votes. Many could not influence local decision-making at all.
7/N
People who paid more taxes also got to cast more votes. Many could not influence local decision-making at all.
7/N
People were unhappy. There were signs of this already before 1918, but discontent eventually led to the civil war.
We show that places that were hit harder by the famine shock, and that had more inequality and labor coercion and higher insurgency participation rates.
8/N
We show that places that were hit harder by the famine shock, and that had more inequality and labor coercion and higher insurgency participation rates.
8/N
The war was over in less than a year. Almost 40,000 individuals died, most of whom were insurgents.
The government side won. Yet, the government decided to implement progressive reforms, perhaps to avoid further unrest.
9/N
The government side won. Yet, the government decided to implement progressive reforms, perhaps to avoid further unrest.
9/N
These reforms included a universal suffrage in local elections and land redistribution.
We document that after the civil war, inequality decreased the most in places that were hit harder by the famine, that were initially more unequal, and that had more insurgents.
10/N
We document that after the civil war, inequality decreased the most in places that were hit harder by the famine, that were initially more unequal, and that had more insurgents.
10/N
Today, Finland is one of the most equal societies. Our example highlights that this was not always the case.
The Finnish experience is perhaps not unique. Many countries have experienced high levels of inequality and civil conflict during the course of their development.
11/11
The Finnish experience is perhaps not unique. Many countries have experienced high levels of inequality and civil conflict during the course of their development.
11/11
