Can Winegrowing Cause Rural Development? Evidence from Baden-Württemberg

Abstract Historical winegrowing shaped modern rural development, even in areas in which its cultivation was given up after the early modern period. We provide evidence for this idea from municipality level data on Southwestern German viticulture over the last 1,300 years, and find a significant link between historical winegrowing and modern economic development. We rely on cross-sectional regressions and on an instrumental variable strategy using precipitation seasonality. Our findings highlight two mechanisms through which historical viticulture affected modern development: by leaving behind a more egalitarian inheritance norm, and a more collectivist society.