Education and Economic Development: The Role of Enlightened Elites

Education and democratization are considered crucial factors in economic development, but the historical roots for this process of modernization are still subject to debate.

One prominent view is that, under the threat of revolution, ruling elites are forced to extend the franchise as a commitment to future redistribution (Acemoglu and Robinson, 2000). Alternative arguments suggest that democratization can also occur absent such threats, because it stimulates public goods provision, which may favor elites indirectly (Galor and Moav, 2002; Lizzeri and Persico, 2004). What these explanations have in common is that they assume a latent demand for democratization and education by the disenfranchised.

However, systematic empirical work examining this 'demand side' is largely missing.
In a recent paper with Nico Voigtänder, we examine the interplay of demand for societal change and subsequent modernization at a critical juncture of history – the French Revolution in 1789. In light of rising tensions in French society in 1788, the absolute monarch King Louis XVI requested each of the three estates – clergy, nobility, and third estate (all others) – to compile the Cahiers de doléances (Letters of grievances). These contained complaints, but also suggestions and demands for changes in the organization of French society, thus providing a unique source for the study of the 'demand side' for societal change in an autocratic regime.

Analyzing these records, we find that demand for modernization was astonishingly small among the lower social classes. For instance, only 24% of Third-Estate Cahiers mentioned a national education system, only 29% had a distinct democratic character and only 4% advocated for freedom of press. However, we find that demand for modernization was strongly associated with the local presence of "knowledge elites" (measured by subscribers to the famous Encyclopédie in the 1770s), as opposed to landowning elites.

Then, we turn to the post-Revolution period and document a strong correlation between the presence of knowledge elites and the expansion of education after 1830 – the period during which the central government pursued major schooling reforms. We also show that the presence of knowledge elites was strongly associated with other indicators of modernization in the second half of the 19th century.

What explains the strong relationship between knowledge elites and modernization in France? Historical evidence suggests that this pattern is driven by the "spirit of enlightenment" of French knowledge elites, who were at the forefront in promoting modernization values and, then, in implementing nation-wide reforms at the local level – especially those that sought to foster mass education. Education, in turn, provided the basis for other dimensions of modernization, such as state building, progressive political views, and social capital. In sum, our findings suggest that enlightened elites had a latent demand for modernization already before the French Revolution, and that they fostered modernization once the political environment after the Revolution allowed for their active involvement.

Our findings suggest a novel angle in the literature that has studied the relationship between elites and development. While the typical view is that elites can hamper economic opportunities for the majority of the population, and have a negative effect on the emergence of public schooling (Sokoloff and Engerman, 2000; Galor, Moav, and Vollrath, 2009), we emphasize the importance of distinguishing between enlightened elites and landowning elites and suggest that the type of elites is crucial for whether they hamper or foster economic development. Our findings also relate to the role of institutions that are put in place by elites (Acemoglu and Robinson, 2012) and suggest that enlightened elites are more likely to foster the development of 'good' (inclusive) institutions – as opposed to 'bad' (extractive) institutions. This opens the door for future research to examine the relationship between the type of elites in power and economic development more systematically.