nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2011‒05‒14
thirteen papers chosen by
Bernardo Batiz-Lazo
Bangor University

  1. Prosecution Associations in Industrial Revolution England: Private Providers of Public Goods? By M Koyama
  2. Identity and Mobility: Historical Fractionalization, Parochial Institutions, and Occupational Choice in the American Midwest By Nicholas Wilson; Kavian Munshi
  3. Land and Law in Colonial India By Anand Swamy
  4. History of the economics department at University of Missouri-Kansas City By Lee, Frederic
  5. Geographical economics : a historical perspective By THISSE, Jean - François
  6. The comeback of the Swiss watch industry on the world market: a business history of the Swatch Group (1983-2010) By Donzé, Pierre-Yves
  7. Boom and Bust of the spanish Economy By Tomer Shachmurove; Yochanan Shachmurove
  8. Why It Worked: Critical Success Factors of a Financial Reform Project in Africa By Peterson, Stephen
  9. The Lasting Damage to Mortality of Early-Life Adversity: Evidence from the English Famine of the late 1720s By Marc Klemp; Jacob Weisdorf
  10. Historical Evidence on the Finance-Trade-Growth Nexus By Michael D. Bordo; Peter L. Rousseau
  11. How Computational Statistics Became the Backbone of Modern Data Science By James E. Gentle; Wolfgang Karl Härdle; Yuichi Mori
  12. The Rise and Fall of Income Inequality in Latin America By Leonardo Gasparini; Nora Lustig
  13. Real wage cyclicality and the Great Depression: evidence from British engineering and metal working firms By Hart, Robert A.; Roberts, J. Elizabeth

  1. By: M Koyama
    Abstract: In early 19th century England there was no professional police force and most prosecutions were private. This paper examines how associations for the prosecution of felons arose to internalise the positive externalities produced by private prosecutions. Drawing upon new historical evidence, it examines how the internal governance and incentive structures of prosecution associations enabled them to provide public goods. Consistent with Demsetz (1970), prosecution associations were economic clubs that bundled the private good of insurance with the public good of deterrence. Associations used local newspapers to advertise rewards and attract new members. Price discrimination was employed in order to elicit contributions from individuals with dierent security demands. Selective incentives helped overcome to free-rider problems between members.
    Keywords: public goods , private prosecutions , insurance selective incentives
    JEL: N43 K42
    Date: 2011–05
  2. By: Nicholas Wilson (Williams College); Kavian Munshi (Brown University)
    Abstract: This paper examines the role played by a specific identity, defined as the attachment to a hometown, in determining occupational choice and mobility. The analysis links competition between ethnic networks in the Midwest when it was first developing, and the in-group identity that emerged endogenously to support these networks, to institutional participation and occupational choice today. Individuals born in counties with greater ethnic fractionalization in 1860 are today -- 150 years later --(i) significantly more likely to participate in institutions such as churches and parochial schools that transmit identity from one generation to the next, and (ii) significantly less likely to select into mobile skilled occupations. The effect of historical fractionalization on participation in these socializing institutions actually grows stronger over the course of the twentieth century, emphasizing the idea that small differences in initial conditions can have large long-term effects on institutions and economic choices.
    Keywords: Identity, Institutional persistence, Networks, Occupational choice, Mobil- ity
    JEL: D85 J62 L14 L22
    Date: 2010–10
  3. By: Anand Swamy (Williams College)
    Abstract: The East India Company’s conquest of various territories in India typically brought one issue to the forefront right away: How would land taxes, the principal source of governmental revenue, be collected? But taxation was not a thing unto itself; it was inextricably linked with “ownership” and indeed with the entire structure of land rights. For this reason, among others, the Company also created/adapted legal systems that would adjudicate the disputes that, inevitably, followed in the wake of its land-rights interventions. The legal and land tenure arrangements chosen also affected credit markets: to the extent land ownership is secure and transferable, land can be used as collateral, or seized in lieu of repayment of debts or other contractual obligations. Land, law, and credit in colonial India generated a huge (and ongoing) discussion: debates preceding policy choices; later commentary within the colonial administration; “nationalist” criticisms from the late 19th century onwards; and current research linking present-day economic outcomes to colonial era choices. In this paper we provide an overview of this literature, focusing on the period 1765-1900. In the interest of brevity and coherence we focus two regions, Bengal, which was first conquered (1757-64), and the Bombay Deccan, which was annexed in 1818, though we make references to other regions as well.
    Date: 2010–12
  4. By: Lee, Frederic
    Abstract: This essay provides a short history of the Department of Economics at UMKC from 1929 to 2010. It shows the origins of its Institutionalist roots beginning in 1946 and ends with the development of the department as a internationally known center of Post Keynesian-Institutional-heterodox economics.
    Keywords: Institutionalism; Heterodox; Post Keynesian
    JEL: B23 A14 B5
    Date: 2011–03–23
  5. By: THISSE, Jean - François (Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium; Paris School of Economics and CEPR)
    Abstract: This paper provides a bird-eye overview of the history of spatial economic theory. It is organized around three main ideas (and authors): (i) land use and urban economics (Thünen), (ii) the nature of competition across space (Hotelling), and (iii) new economic geography and the emergence of economic agglomerations (Krugman).
    Date: 2011–02–01
  6. By: Donzé, Pierre-Yves
    Abstract: The objective of this paper is to contribute to a better understanding of the comeback of the Swiss watch industry on the world market since the end of the 1980s. It focuses on the Swatch Group (SG), currently the world’s biggest watch company. In 1983, the merger of the largest watch group (SSIH) and of the trust controlling the production of parts and movements of watches (ASUAG) into SG was the main measure taken to overcome the Japanese competition. Managed since 1986 by Nicolas G. Hayek (1928-2010), SG experienced a high growth and recovered its competitiveness on the world market, becoming a driving force for the entire Swiss watch industry. This success is traditionally explained by the firm itself and by scholars as the result of the launch of a new product (Swatch, a cheap plastic quartz watch first marketed in 1983) and the persistence of an old technical culture in Switzerland which enabled this rebirth. This paper, based on SG annual reports, focuses on the strategy adopted by SG since 1983. It shows that, rather than product innovation (Swatch), it was the rationalization and globalization of the production system (concentration of strategic parts’ production in Switzerland; transfer of production facilities in Asia), together with a new marketing strategy (brand segmentation, distribution and retailing facilities, communication, etc.) which were the two main sources of the comeback of the Swiss watch industry on the world market. While Japanese still attach great attention to product innovation, SG largely established its competitiveness on non-technological innovation.
    Keywords: Watch Industry; Switzerland; Swatch Group; Luxury Goods; Marketing Strategy
    JEL: M31 N80
    Date: 2011–04
  7. By: Tomer Shachmurove (Pennsylvania State University); Yochanan Shachmurove (Department of Economics, University of Pennsylvania)
    Abstract: Spain has experienced many financial crises through its history. These financial crises have varied origins. However, they do have common threads. The current recession and subsequent debt crisis follow the same pattern. The fiscal and monetary policies of the Spanish government have played a role in creating and prolonging the boom and bust cycles. Government spending, government regulation, credit institutions, budget deficits, the political climate, and international trade are discussed to illuminate the causes and effects of these business cycles. The Spanish government can take action to improve the economy and to lessen the effects of its financial crises.
    Keywords: Spain; Spanish Economy; Financial Crises, Federal Budget Deficit, Banking Crises, Subprime Mortgage; Spanish Industrial Revolution; Economic History; Political Economy; International Trade; Government Regulation
    JEL: E0 E3 E44 E5 E6 F0 G0 G18 G38 N0 N1 N2
    Date: 2011–05–03
  8. By: Peterson, Stephen (Harvard University)
    Abstract: Little is written about the critical success factors that make or break a project implementing a public financial management reform in Africa. Based on the twelve year experience of Harvard's DSA project which transformed Ethiopia's financial management in the third best on the continent, this paper presents the key factors of the projects success: task, context, patrons, roles, staff and decisions. The task was focused from the start on the basics of financial control (budget and accounts and their budget classification, chart of accounts and financial calendar) and the development of an often forgotten end state in PFM reform--the self-accounting unit. Three features of context supported the project: political (close ties between the US and Ethiopia government established during the civil war), task environment (a hard budget constraint) and, serendipity (a war that ensure one set of cooks in the kitchen and removed the inevitable critique by foreign aid agencies, and the government policy of second stage devolution--which made the focal point of district level decentralization). The third CSF, the projects patrons, stayed the course, met stated commitments and did not meddle. The project performed four roles (go-between in the vacuum of decentralization), decider (making the key decisions on pilots), first responder (providing PFM innovations not specified in the terms of reference) and perhaps most important, the furniture (an object that could be kicked and blamed). The project was able to assemble the array of essential staff: all rounders, managers, technicians, networkers and a closer.
    Date: 2011–03
  9. By: Marc Klemp (Department of Economics, University of Copenhagen); Jacob Weisdorf (Department of Economics, University of Copenhagen)
    Abstract: This paper explores the long-term impact on mortality of exposure to early-life hardship. Using survival analysis, we document that birth during the great English famine of the late 1720s manifest itself in an increased death risk throughout life among those who survive the famine years. Using demographic data from the Cambridge Group’s Population History of England, we find that the death risk of affected individuals who survived to age 10 is up to 66 percent higher than that of their control–group counterparts (those born in the five years following the famine). This corresponds to a loss of life-expectancy of more than 12 years. We find that effects differ geographically as well as with the socioeconomic status of the household, with less well-off (manual-worker) families and families living in the English Midlands being hit the hardest. Evidence does not suggest, however, that children born in the five years prior to the famine suffered increased death risk.
    Keywords: Death Risk; Malthus; Longevity; Positive Checks; Scarring Effect; Selection Effect
    Date: 2011–05
  10. By: Michael D. Bordo; Peter L. Rousseau
    Abstract: We study linkages between financial development, international trade, and long-run growth using data since 1880 for seventeen now-developed “Atlantic” economies and a set of cross-country and dynamic panel data models. We find that finance and trade reinforced each other before 1930, but that these effects did not persist after the Second World War. Financial development has positive effects on growth throughout the sample period, while trade affects growth strongly and independently after 1945. We attribute the rising importance of trade in explaining growth to major post-World War II changes in tariffs and quantity restrictions associated with the GATT, the establishment of the European Common Market, and the gradual elimination of capital controls after 1973. The findings are robust to the use of ‘deep’ fundamentals such as legal origin and indicators of the political environment as instruments for financial development and trade. Financial development, however, is more closely linked to these fundamentals than trade.
    JEL: E44 F14 F15 N1 N2
    Date: 2011–05
  11. By: James E. Gentle; Wolfgang Karl Härdle; Yuichi Mori
    Abstract: This first chapter serves as an introduction and overview for a collection of articles surveying the current state of the science of computational statistics. Earlier versions of most of these articles appeared in the first edition of Handbook of Computational Statistics: Concepts and Methods, published in 2004. There have been advances in all of the areas of computational statistics, so we feel that it is time to revise and update this Handbook. This introduction is a revision of the introductory chapter of the first edition.
    Keywords: Discrete time series models, continuous time diffusion models, models with jumps, stochastic volatility, GARCH
    JEL: C15
    Date: 2011–05
  12. By: Leonardo Gasparini (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS) - FCE - UNLP); Nora Lustig (Tulane University and Center for Global Development and the Inter-American Dialogue.)
    Abstract: Este artículo documenta el patrón de auge y caída de la desigualdad del ingreso en América Latina en el período 1980-2008 y presenta posibles determinantes de estas tendencias. Después de una revisión general de las tendencias regionales y comparaciones con otras regiones del mundo, el estudio se centra en tres países en los que es posible realizar un análisis más profundo: Argentina, Brasil y México.
    Date: 2011–05
  13. By: Hart, Robert A.; Roberts, J. Elizabeth
    Abstract: Based on firm‐level payroll data from around 2000 member firms of the British Engineering Employers' Federation we examine the behavior of real hourly earnings over the 1927‐1937 cycle that contained the Great Depression. The pay statistics are based on adult male blue‐collar workers within engineering and metal working firms. They allow us to distinguish between pieceworkers and timeworkers and they are delineated by 14 occupations and 51 travel‐to‐work geographical engineering districts. We measure the cycle using national unemployment rates as well as rates that match our district breakdowns. Differences are found in the real hourly earnings cyclicality of pieceworkers and timeworkers. We attempt to relate our findings to those of modern micro panel data studies of real wage cyclicality. We offer some insight into why the estimates of real hourly pay display less procyclicality during the 1920s and 1930s than in studies based on more recent data.
    Keywords: aggregation bias; timework; piecework; the Great Depression; Real wage cyclicality
    Date: 2011–05

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