Property Rights and the Emergence of Modern Life Expectancies

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Friday, September 13, 2013
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sewersBetween 1850 and 1950, the Western world witnessed remarkable and historically unprecedented improvements in human health and longevity. In the United States, life expectancy at birth among whites increased by 75 percent, growing from 39.5 to 69. Among non-whites there was an even larger increase, with life expectancy more than doubling, rising from 23 to 60.8. These improvements were associated with, and mostly driven by, reductions in infectious diseases such as typhoid fever, influenza, bronchitis, diphtheria, and tuberculosis.

The eradication of infectious diseases is typically seen as a purely technological process, stemming from such factors as the introduction of public water supplies or the discovery of the diphtheria antitoxin. But whatever technologies one wishes to emphasize, the focus on technology is far too simple because new technologies, and the capital investments that embodied those advances, were predicated on political and legal institutions—particularly the institutions that promote secure property rights.

Nowhere are the connections among property rights, capital investments in public health, and the mortality transition clearer than in the history of typhoid fever. A waterborne disease, typhoid was eradicated through a series of city-level decisions to invest in water distribution networks and water filtration. Cities made these investments in response to the demands of voters who wanted responses to repeated typhoid epidemics. In turn, politicians were rewarded with re-election for implementing such responses.

In a forthcoming book, I describe how provisions in state and federal constitutions protecting potential investors were critical to cities in their efforts to raise the funds necessary to build public water and sewer systems and to attract private companies to the cities to operate those systems. Absent these protections, creditors would have been reluctant to lend money and private companies would have been leery of constructing such systems. Why? American cities had a checkered past both in terms of corruption and reckless financial practices—particularly in relation to the railroads.

Demographic evidence suggests that developments in water quality account for more than half of the improvements in human longevity observed over the course of the late nineteenth and early twentieth century. This occurred because access to safe drinking water affected a broad range of health outcomes, not just waterborne diseases.  

To the extent that property rights and the protection of municipal creditors made investments in public water supplies possible, or at least hastened them, secure property rights were responsible for much of the improvement in human longevity observed between 1850 and 1950, the largest and most rapid improvement in human health in recorded history.

 

Werner Troesken is a 2013 PERC Julian Simon Fellow and Professor of Economics at the University of Pittsburgh and Faculty Research Associate at NBER. He is the author of The Great Lead Water Pipe Disaster (MIT Press, 2008) and Water, Race, and Disease (MIT Press, 2004).

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Werner Troesken is a Professor of Economics at the University of Pittsburgh and a Faculty Research Associate at the National Bureau of Economic Research. He has been a National Fellow at the Hoover Institution; a John M. Olin Faculty Fellow; and held visiting positions at the University of Chicago and the University of Arizona. His research has...
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