Was Domar Right? Serfdom and Factor Endowments in Bohemia
Are institutions shaped by factor endowments? Labor-coercion institutions such as serfdom and slavery, which profoundly restricted economic growth, were ascribed by Domar to high land-labor ratios. But historical evidence appeared to refute this hypothesis. We carry out the first multivariate analysis of factor proportions and serfdom, using data for over eleven thousand serf villages in eighteenth-century Bohemia. Controlling for other variables, the net effect of higher land-labor ratios was indeed to increase labor coercion. The impact intensified when landlords extracted labor in human-animal teams, and diminished as land-labor ratios rose, which can be explained by the costs of coercion. Outside options in the urban sector exerted no effect. We conclude that institutions are indeed partly shaped by economic fundamentals.