New Economics Papers
on Business, Economic and Financial History
Issue of 2011‒07‒21
sixteen papers chosen by

  1. Auditors and the supervision of retail finance: evidence from two small-sized building societies, 1976-1978 By Batiz-Lazo, Bernardo; Noguchi, Masayoshi
  2. Economic Reforms and Growth in Franco’s Spain By Leandro Prados de la Escosura; Joan R. Rosés; Isabel Sanz Villarroya
  3. Protection through Proof of Age. Birth Registration and Child Labor in Early 20th Century USA. By Sonja Fagernäs
  4. The Evolution of Grain Policy Beyond Europe: Ottoman Grain Administration in the Late Eighteenth Century By Seven Agir
  5. The First WorldWar andWorking-Class Food Consumption in Britain By Ian Gazeley; Andrew Newell
  6. The Colonial Origins of the Divergence in the Americas: A Labour Market Approach By Robert C. Allen; Tommy E. Murphy; Eric B. Schneider
  7. The end of destitution: Evidence from British working households 1904-1937 By Ian Gazeley; Andrew Newell
  9. Legal origin, colonial origin and deforestation By Sébastien Marchand
  10. Evolución de los comunales y transformaciones agrarias en el entorno de Madrid en la Edad Moderna, siglos XV-XVIII By Hernando Ortego, Javier
  11. Exporting Poor Health: The Irish in England By Liam Delaney; Alan Fernihough; James P. Smith
  12. Social Policy and U.S. Poverty 1960-1999: An Economic History By Jaynes, Gerald D.
  13. La gestión financiera de las Haciendas Municipales en la Edad Moderna. El caso de los Bienes de Propios de Madrid. By Hernando Ortego, Javier
  14. Affectivité et sentiment en économie politique : Cartas sobre los obstáculos que la naturaleza, la opinión y las leyes oponen a la felicidad pública du comte de Cabarrús (1795) By Marc Marti
  15. A survival analysis of the circulation of the political elites governing Italy from 1861 to 1994. By Silvia Fedeli; Francesco Forte
  16. Does trade opennes increase vulnerability? A survey of the literature By Pierluigi Montalbano

  1. By: Batiz-Lazo, Bernardo; Noguchi, Masayoshi
    Abstract: This study adds to the accounting history literature by looking at features common to major defalcations in two small-sized building societies (namely the Wakefield and the Grays). These features were the dominance of an individual over a building society’s systems, and poor systems of internal control and supervision. Because they failed to recognise the significance of these factors sufficiently, auditors of both societies were criticised for failing to discharge their duties as expected under the Building Societies Act 1960 (BSA60) (which had introduced a new auditing regime by requiring the auditors to examine whether the directors of a society complied with its requirement to establish and maintain a system of internal control and, if not, to report thereon). The cases of the Wakefield and the Grays were a turning point in the supervision of retail financial intermediaries. Prior to them the Chief Registrar of Friendly Societies (CRFS) had adopted a reactive approach to supervision, which effectively delegated the monitoring of the societies to external auditors. After the defalcations were uncovered, they showed there was a lack of productive communication between the Registry and external auditors. As a result, it was felt there was a need to reform and adopt a proactive approach to supervision of the societies under which the CRFS was to directly examine the quality of the auditor’s work. The professional accountants, as represented by the Institute of Chartered Accountants of England and Wales, initially resisted such reform. But ultimately, accountants could not help but to accept it.
    Keywords: corporate governance (the system of internal control); building societies; the Chief Registrar of Friendly Societies (CRFS); the Treasury; supervision of retail financial intermediaries; delegated monitoring; UK; accounting history; financial auditing
    JEL: N8 M41 N2 G21
    Date: 2011–07
  2. By: Leandro Prados de la Escosura; Joan R. Rosés; Isabel Sanz Villarroya
    Abstract: This paper is an attempt at assessing the economic impact of market-oriented reforms undertaken during General Franco’s dictatorship, in particular, the 1959 Stabilization and Liberalization Plan. Using an index of macroeconomic distortions (IMD) the relationship between economic policies and the growth record is examined. Although a gradual reduction in macroeconomic distortions was already in motion during the 1950s, the 1959 Plan opened the way to a new institutional design that favoured a free-market allocation of resources and allowed Spain to accelerate growth and catch up with Western Europe. Without the 1950s reforms and, especially, the 1959 Plan, per capita GDP would have been significantly lower in 1975
    Keywords: Spain, Franco’s dictatorship, Economic reforms, Stabilization, Liberalization, Growth
    JEL: E65 F43 N14 N44 O43
    Date: 2011–07
  3. By: Sonja Fagernäs (Department of Economics, University of Sussex)
    Abstract: A birth certificate establishes a child's legal identity and is the sole official proof of a child's age. However, quantitative estimates on the economic significance of birth registration are lacking. Birth registration laws were enacted by the majority of U.S. states in late 19th and early 20th centuries. Controlling for state of birth and cohort effects, the differential timing of birth registration laws across US states is used to identify whether birth registration changed the effectiveness of child labor legislation between 1910 and 1930. The incidence of child labor declined significantly in the early 20th century. The study finds that if a birth registration law had been enacted by the time a child was born, the effectiveness of minimum working age legislation in prohibiting under-aged employment more than doubled. This effect was stronger for children residing in non-agricultural areas.
    Keywords: Birth registration, Child Labor, Law and Economics, Economic history, USA
    JEL: J88 K4 N32 O10
    Date: 2011–06
  4. By: Seven Agir (Department of Economics, Yale University)
    Abstract: During the second half of the eighteenth century, the Ottoman policy-makers adopted a more liberal attitude towards price formation in the Ottoman grain markets. This was accompanied by the fiscal and administrative centralization of the grain trade. These seemingly contradictory policy changes could, in part, be explained in the context of conjectural changes in grain demand and supply, which rendered pre-emptive privileges and price controls less effective. The policy change, however, was not only a practical response to the strains on the pre-existing supply network but also reflected a new concern with the state of agricultural production along with the emergence of emulation as a development strategy.
    Keywords: Ottoman economic institutions, grain markets, liberalization
    JEL: B15 N33 N35 N43 N45
    Date: 2011–06
  5. By: Ian Gazeley (Department of History, University of Sussex); Andrew Newell (Department of Economics, University of Sussex)
    Abstract: This paper reassesses the food consumption and dietary impact of the regimes of food and food price control and eventually, food rationing, that were introduced in Britain during the First World War. At the end of the War the Sumner Committee was convened to investigate the effects of these controls on the diets of working class families. With the help of some of the original returns of an earlier 1904 survey, we are able to reassess the Sumner Committee findings. We find that, although calories intakes did not fall for households headed by unskilled workers, there were substantial falls for skilled workers’ households. We also find that the price controls were particularly effective in changing the pattern of food spending. In particular, because the prices of many fruits and vegetables were allowed to rise much more than other foods, there were large falls in the intakes of nutrients most associated with these foods, to average levels well below today’s recommended intakes.
    Keywords: First World War, Britain, food controls, food consumption, nutrition
    JEL: N34 N44
    Date: 2010–11
  6. By: Robert C. Allen; Tommy E. Murphy; Eric B. Schneider
    Abstract: Part of a long-run project to put together a systematic database of prices and wages for the American continents, this paper takes a first look at standards of living in a series of North American and Latin American cities. From secondary sources we collected price data that –with diverse degrees of quality– covers various years between colonization and independence and, following the methodology now familiar in the literature, we built estimations of price indexes for Boston, Philadelphia, and the Chesapeake Bay region in North America and Bogotá, Mexico, and Potosí in Latin America exploring alternative assumptions on the characteristics of the reference basket. We use these indexes to deflate the (relatively more scarce) figures on wages, and compare the results with each other, and with the now widely known series for various European and Asian cities. We find that real wages were higher in North America than in Latin America from the very early colonial period: four times the World Bank Poverty Line (WBPL) in North America while only two times the WBPL in Latin America. These wages place the North American colonies among the most advanced countries in the world alongside Northwestern European countries and the Latin American colonies among the least developed countries at a similar level to Southern European and Asian countries. These wage differences existed from the early colonial period because wages in the American colonies were determined by wages in the respective metropoles and by the Malthusian population dynamics of indigenous peoples. Settlers would not migrate unless they could maintain their standard of living, so wages in the colonies were set in the metropole. Political institutions, forced labour regimes, economic geography, disease environments and culture shaped the size of the economy of each colony but did not affect income levels.
    Date: 2011
  7. By: Ian Gazeley (Department of History, University of Sussex); Andrew Newell (Department of Economics, University of Sussex)
    Abstract: This paper estimates and investigates the reduction, almost to elimination, of absolute poverty among working households in Britain between 1904 and 1937. To do this, it exploits two newly-digitised data sets. The paper is a statistical generalisation, to working families in the whole of Britain, of the finding that absolute poverty declined dramatically over the early part of the twentieth century in the towns studied by, among others, Bowley and Rowntree. The paper offers a number of pieces of corroborative evidence that support the estimates. It simulates a decomposition of the poverty reduction into the effects of three proximate causes. The first two causes are the decline in family size and the rise of real wages and these were of roughly equal importance for poverty reduction. The third cause is a decline in wage inequality, but this is of relatively minor importance for poverty reduction among working households. It concludes with a discussion of deeper causes.
    Keywords: poverty, living standards, Britain, demographic change, real wage growth
    JEL: N3 O12
    Date: 2010–06
  8. By: Rahman Ebrahimi Tabar (Faculty of Human Scientific, Islamic Azad Universiity, Shootar Branch, Iran)
    Abstract: In the knowledge society of the 21 century human resources development (HRD) is of critical importance in both enhancing the competitiveness of nations and ensurance social integration to wards national development
    Keywords: Knowledge society, resources management, social welfare, national development, information technology, national innovation system, research and development, vocational education
    JEL: M00
    Date: 2011–06
  9. By: Sébastien Marchand (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: This paper investigates whether inherited legacies such as legal origin allow of explaining deforestation in 110 developed and developing countries. The hypothesis is that differences in deforestation between countries can be attributed to their legal systems. Also, since nearly all common law countries are former English colonies, and nearly all civil law countries were colonized by France, Spain or Portugal, legal origin and colonial history are strongly correlated, so that one can not attribute all the variance to the effect of the legal system. What is found overall is that (i) French civil law countries deforest less than English common law ones within the total sample, within the sample of colonized countries, and within the sample of tropical developing countries; (ii) Former French colonies deforest less than former English colonies. These results hold when geography features are controlled for since the process of colonization was not random and depended on initial geographic and climatic conditions.
    Keywords: Deforestation; Colonial legacies; Legal origin
    Date: 2011–07–11
  10. By: Hernando Ortego, Javier (Departamento de Análisis Económico: Teoría e Historia Económica (Universidad Autónoma de Madrid))
    Abstract: El objetivo de este trabajo es el estudio de la evolución de los derechos y bienes comunales en el entorno rural de la ciudad de Madrid durante la Edad Moderna. El análisis a largo plazo permite detrminar los diferentes procesos de cambio y los factores de estas transformaciones. El objetivo fundamental del ayuntamiento de Madrid fue la conversión de comunales en tierras de propios que aumentaran los ingresos de la hacienda municipal, lo que se desarrolló a lo largo de un amplio período de tiempo. A ello se añade la presencia de la monarquía, tanto mediante la formación de un patrimonio real en los alrededores de la ciudad tras el establecimiento de la Corte en 1561, como con la presión fiscal, que culminó con la venta de tierras baldías en el s. XVII. Se analiza la actitud de las comunidades campesinas ante estas transformaciones, que se mostraron inicialmente favorables a la roturación de pastizales en los períodos expansivos y su control por parte de los concejos aldeanos; en cambio se opusieron a la pérdida de derechos comunales en los espacios forestales. Pero a largo plazo la disolución de la comunidad campesina se traduce en la paralela decadencia de los comunales, un proceso que tendrá una desigual incidencia en las aldeas cercanas a la ciudad.
    Keywords: commons, village communities, property rights, city and hinterland, agrarian history.
    JEL: Q15 R52
    Date: 2010–12
  11. By: Liam Delaney (Geary Institute and School of Economics, University College Dublin,); Alan Fernihough (Geary Institute and School of Economics, University College Dublin); James P. Smith (Rand Corporation)
    Abstract: The Irish-born population in England is in worse health than both the native population and the Irish population in Ireland, a reversal of the commonly observed healthy migrant effect. Recent birth-cohorts living in England and born in Ireland, however, are healthier than the English population. The substantial Irish health penalty arises principally for cohorts born between 1920 and 1960. This paper attempts to understand the processes that generated this migrant health pattern. Our results suggest a strong role for early childhood conditions and economic selection in driving the dynamics of health differences between the Irish-born migrants and White English populations.
    Date: 2011–07–12
  12. By: Jaynes, Gerald D. (Yale University)
    Abstract: Interrogates poverty debate (growth versus redistribution) reignited by underperforming poverty reductions during 1980s' social spending austerity compared to 1960s' "War on Poverty." Growth and inequality explain 75% 1959-1999 poverty variation; census measurement changes 17%. Significantly, census measurement changes plus overestimated inflation biased-up 1980s measured poverty (deflated 1960s) partly explaining eighties' underperformance. Growth's poverty effect remained constant; rising inequality required 1980's growth 50% higher (1960s) for equivalent poverty reductions. Counterfactual simulations 1959-1999: absent rising earnings inequality, growth drives poverty to 5.4%; increased workerless households offset two-thirds poverty reduction from cash transfers; had Carter and Reagan redistributed like predecessors, poverty reduced one-half.
    JEL: N12 N32
    Date: 2011–05
  13. By: Hernando Ortego, Javier (Departamento de Análisis Económico: Teoría e Historia Económica (Universidad Autónoma de Madrid))
    Abstract: El estudio de la gestión de las finanzas Municipales permite profundizar en el conocimiento de la funcionalidad y eficiencia de las instituciones en la Edad Moderna. En este trabajo se analiza el caso del patrimonio municipal de Madrid, una parte fundamental de las haciendas locales. Su gestión se estructura en tres niveles: el nivel político, en el que la toma de decisiones y control sobre los propios corresponde al ayuntamiento (corregidor y regidores); la administración y tesorería, que recaía en el mayordomo y, por último, el control contable por parte de diversas contadurías. Este entramado institucional se estudia en una perspectiva de largo plazo, analizando los cambios e innovaciones experimentadas, especialmente con las reformas en el régimen municipal llevado a cabo en el s. XVIII.
    Keywords: municipal finances, municipal property, local accounting, municipal officers, Madrid.
    JEL: N43 M49 R51
    Date: 2010–12
  14. By: Marc Marti (EA 3159 - CIRCPLES - Université de Nice Sophia-Antipolis : EA)
    Abstract: Le travail qui suit est une étude sur l'émergence de l'économie politique en Espagne et de ses relations avec la rhétorique. Nous insistons en particulier sur le recours aux sentiments dans l'écriture d'une des œuvres de référence du premier libéralisme espagnole les Cartas sobre los obstáculos que la naturaleza, la opinión y las leyes oponen a la felicidad pública du comte de Cabarrús (1795).
    Keywords: Libéralisme; pensée économique; Cabarrús; Espagne; Lumières
    Date: 2010–07–01
  15. By: Silvia Fedeli; Francesco Forte
    Abstract: We study the determinants of governments and legislatures’ survival in Italy from the unification to the end of the I Republic (1861-1994) - excluding the fascist period and the subsequent transitory institutional period, "Constituente" (1946-1948). We test whether institutional features such as electoral systems, form of State and extent of suffrage had any effect on the survival of legislatures and governments. We control for voting power of the parliamentary groups, number of parties represented in the parliament and size of the representative bodies. Unlike the political economy wisdom, we show that, over the whole period, governments and legislatures’ survivals are inversely related to the plurality electoral system. The restricted suffrage and a high voting power of the leading parties reduce the risk of anticipated end of governments. The survival of the legislatures is related to the form of state (republic) and to the voting power of the leading party.
    Keywords: Elites; Survival analysis; Electoral systems; Voting power, Political institutions.
    Date: 2011–04
  16. By: Pierluigi Montalbano (Department of Economic Theory and Quantitative Methods for Political Choices, Sapienza-University of Rome; Department of Economics, University of Sussex)
    Abstract: This work focuses on the welfare costs of exposure to shocks and uncertainty linked to trade opennes - a prominent issue in the international debate. It contributes by presenting a comprehensive review of the literature on the "destabilizing effects" of trade openness, drawing together studies in different fields. It provides a conceptualization of vulnerability and three promising lines of reasoning for future research on the link between trade and vulnerability.
    Keywords: vulnerability, trade openness, volatility, crisis transmission, developing countries
    JEL: F40 I32 C82 E17 D60
    Date: 2010–09

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