Author(s): Vitaliia Yaremko
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I assemble a novel dataset to examine the long-term consequences of blacklisting, a Soviet policy used to deter market-oriented behavior through collective punishment of Ukrainian villages in 1932-33. Under blacklisting, all village residents could be banned from trade and provision of crucial goods, prohibited from moving, and imposed harsh in-kind fines. Formally, the policy was meant to punish the communities underperforming in terms of state food procurement (similar to in-kind taxation) because local procurement shortfalls supposedly were a consequence of intentional, profit-seeking behavior. Using a weather-based instrument for the locality’s blacklisting status, I document that blacklisting significantly reduced the present-day nightlight intensity (a proxy measure for economic development). Additional evidence points to entrepreneurship and trust as channels for this effect. My results support the notion that policies that suppress economic freedoms and disrupt social structure can have persistent negative effects on economic performance.
Published: 2023-02-09 11:14:05 PT
Stage: Working Paper
Fields: Political Economy, Economic History
Research Group(s): Playground
Referee Reports: Report 1 (Add your report)
Versions: v1 (02/09/2023)