The Celestial Empire: solar eclipses, political legitimacy, and economic performance in historical China

We exploit a unique historical experiment to study how changes in political legitimacy affect economic performance. In historical China, solar eclipses were interpreted as Heaven's wrath incurred by wrongdoings of the ruling class, signaling a decline in the incumbent's legitimacy. Using an original dataset covering over 2000 years, we document that when total solar eclipses occurred, climate shocks had a greater negative impact on economic performance. The key mechanism appears to be that total eclipses significantly intensified the effect of climate shocks on civil conflict. Our findings thus highlight the importance of political legitimacy during periods of economic downturn.