New Economics Papers
on Business, Economic and Financial History
Issue of 2011‒09‒05
eighteen papers chosen by

  1. Who Are the Entrepreneurs? The Elite or Everyman? By Haveman, Heather A.; Habinek, Jacob; Goodman, Leo A.
  2. Transparency, Appropriability and the Early State By Mayshar, Joram; Moav, Omer; Neeman, Zvika
  3. From national monopoly to Multinational Corporation: how regulation shaped the road towards telecommunications internationalization By Clifton, Judith; Díaz-Fuentes, Daniel; Comín Comín, Francisco
  4. La Nueva Política Económica de la OCDE ante el cambio en la Economía Mundial By Clifton, Judith; Díaz-Fuentes, Daniel
  5. International Financial Crises and the Multilateral Response: What the Historical Record Shows By Bergljot Barkbu; Barry Eichengreen; Ashoka Mody
  6. Does Trade Cause Capital to Flow? Evidence from Historical Rainfalls By Kalemli-Ozcan, Sebnem; Nikolsko-Rzhevskyy, Alex
  7. Religião, religiosidade e iniciação sexual na adolescência: meio século de pesquisas By Raquel Zanatta Coutinho; Carla Jorge Machado; Paula Miranda-Ribeiro
  8. The Golden Mean, the Arab Spring and a 10-step analysis of American economic history By Albers, Scott A.; Albers, Andrew L.
  9. Measuring Institutions: Indicators of Political and Economic Institutions in Namibia: 1884 - 2008 By B.P. Zaaruka; J.W. Fedderke
  10. Evaluating the Contributions of Regional Trade Agreements to Governance of Services Trade By Stephenson, Sherry; Roberts, Maryse
  11. La Experiencia de Banca Libre en Bogotá (1871-1880): de la utopía económica al pragmatismo frente a las crisis By Andrés Álvarez; Jennifer A. Timoté
  12. International Affairs and the Public Sphere By Walt, Stephen M.
  13. Integrating Personality Psychology into Economics By James J. Heckman
  14. The power of the strong state: A comparative analysis of the diaspora engagement strategies of India and Ethiopia By Kuschminder, Katie; Hercog, Metka
  15. Tactics and Strategy in Monetary Policy: Benjamin Friedman's Thinking and the Swiss National Bank By Gerlach, Stefan; Jordan, Thomas J.
  16. Anarchism and Austrian economics By Boettke, Peter
  17. The Economics of Lotteries: An Annotated Bibliography By Kent Grote; Victor Matheson
  18. Under the influence of traumatic events, new ideas, economic experts and the ICT revolution - the economic policy and macroeconomic performance of Sweden in the 1990s and 2000s By Erixon, Lennart Erixon

  1. By: Haveman, Heather A.; Habinek, Jacob; Goodman, Leo A.
    Abstract: We trace the evolving social positions of the people who found new enterprises over the course of industry history. Sociological theory suggests two opposing hypotheses. First, pioneering entrepreneurs are socially prominent individuals or those from related industries while later entrepreneurs are from an increasingly broad range of social positions. Second, the earliest entrepreneurs come from the social periphery while later entrepreneurs include more industry insiders and members of the social elite. To test these hypotheses, we trace the social positions of entrepreneurs in the magazine industry in America over the first 120 years of the industry’s history, from 1741 to 1860. We find that magazine publishing was originally restricted to industry insiders, elite professionals, and the highly educated, but by the time the industry became well established, most founders came from outside publishing and more were of middling stature – mostly small-town doctors and clergy without college degrees. We also find that magazines founded by industry insiders remained concentrated in the three biggest cities, while magazines founded by outsiders became geographically dispersed. Our analysis demonstrates the importance of grounding studies of entrepreneurship in this and other industries in historical context. Our analysis of this “old†new media industry also offers hints about how “new†new media industries will evolve.
    Keywords: Business Administration, Management, and Operations, Entrepreneurial and Small Business Operations
    Date: 2011–07–11
  2. By: Mayshar, Joram; Moav, Omer; Neeman, Zvika
    Abstract: We propose a general theory that explains the extent of the state and accounts for related institutions as byproducts of the state's extractive technology. We posit further that this extractive technology is determined by the transparency of the production technology. This theory is applied to examine two principal phases in the evolution of the early state. First, we argue that the common explanation of the emergence of the state as a consequence of the availability of food surplus due to the Neolithic Revolution is flawed, since it ignores Malthusian considerations. In contrast, we suggest that what led to the emergence of the state was a transformation of the tax technology that was induced by the greater transparency of the new farming technology. We then apply our theory to explain key institutional features that distinguished ancient Egypt from ancient Mesopotamia, and, in particular, to explain their different land tenure regimes.
    Keywords: Appropriability; Institutions; Land Tenure; The Early State; Transparency
    JEL: D02 D82 H10 O43
    Date: 2011–08
  3. By: Clifton, Judith; Díaz-Fuentes, Daniel; Comín Comín, Francisco
    Abstract: One of the consequences of major regulatory reform of the telecommunications sector from the end of the 1970s – particularly, privatization, liberalization and deregulation – was the establishment of a new business environment which permitted former national telecommunications monopolies to expand internationally. From the 1990s, a number of these firms, particularly those based in Europe, joined the rankings of the world’s leading Multinational Corporations. Their internationalization was uneven, however: while some firms internationalised strongly, others went abroad much slower. This article explores how the regulatory framework within which telecommunications incumbents evolved over the long-term helped shape their subsequent, uneven, paths to internationalization. Two cases representing ´maximum variation´ are selected: Telefónica, whose early and unrelenting expansion transformed it into one of the world’s most international of Multinational Corporations, and BT, whose international ventures failed and, with decline domestic shares, forced the firm to partial de-internationalization, becoming the least international of the large European incumbents. Long-term ownership, access to capital, management style and exposure to liberalization strongly influenced firms’ approaches to internationalization.
    Keywords: Regulation; Telecommunications; Internationalization; Europe; Privatization; Liberalization; Multinational Corporations
    JEL: L96 N74 L51 F23 N44 N84 L98 H82
    Date: 2011
  4. By: Clifton, Judith; Díaz-Fuentes, Daniel
    Abstract: For decades, the OECD constituted an economic and political "club" of Western countries focused around the transatlantic axis. Today, it faces unprecedented challenges as the world economy shifts to the East and the South. In response, the OECD is undergoing meaningful reform: it is becoming more inclusive by broadening out membership, whilst taking a more open-minded approach to policy, recognising there are more ways to economic growth than the "OECD way". The OECD needs to engage the new economic players, but do they really need the OECD? Using primary data, official documents, semi-structured interviews with high officials and secondary sources, this paper evaluates the prospective roles the organization could play in international economic governance at the beginning of the twenty-first century.
    Keywords: Organization for Economic Cooperation and Development (OECD), Clubs, International Economic Order, International Organizations, International Political Economy, International Public Goods
    JEL: D73 D71 H87 F02 F59 F53 O19
    Date: 2011
  5. By: Bergljot Barkbu; Barry Eichengreen; Ashoka Mody
    Abstract: We review the modern history of financial crises, providing a context for analyses of the world’s recent bout of financial instability. Along with indicators of economic performance in the subject countries, we present a comprehensive description of multilateral rescue efforts spanning the last 30 years. We show that while emergency lending has grown, reliance on debt restructuring has declined. This leads us to ask what can be done to rebalance the management of debt problems toward a better mix of emergency lending and private sector burden sharing. Building on the literature on collective action clauses, we explore the idea of sovereign cocos, contingent debt securities that automatically reduce payment obligations in the event of debt-sustainability problems.
    JEL: F0 F4
    Date: 2011–08
  6. By: Kalemli-Ozcan, Sebnem; Nikolsko-Rzhevskyy, Alex
    Abstract: Estimating the effect of trade on capital flows is difficult given the inherent identification problem. We use fluctuations in rainfall to capture the exogenous variation in trade between Germany, France, the U.K., and the Ottoman Empire during 1859-1913. The provisionistic policy of the Ottoman Empire--only surplus production was exported--constitutes the basis of our identification strategy. We find that one standard deviation in rainfalls from the mean leads to a 3.5 percent increase in Ottoman exports, which in turn causes a 10 percent increase in capital inflows from the three source countries. Our findings support trade theories predicting complementarity between trade and capital flows.
    Keywords: capital flows; default; empire; exports; FDI; rainfalls
    JEL: F10 F30 F40 N10 N20 N70
    Date: 2011–08
  7. By: Raquel Zanatta Coutinho (Cedeplar/UFMG); Carla Jorge Machado (Cedeplar/UFMG); Paula Miranda-Ribeiro (Cedeplar/UFMG)
    Abstract: Religion as a variable with an impact on sexual behavior has emerged in the Brazilian literature as two changes are embedded in this society: the changing religious scenery and the norms and values associated with sexuality. The influence of religion on sexuality has been investigated by international researchers for nearly half a century. Given the growing interest in this demographic variable, studies are needed in order to give intellectual support for future research in Brazil. The present paper seeks to review the national and international literature on links among religion, religiosity and adolescent sexual initiation. Databases used were SciELO, Atla, JSTOR and Thesis Cedeplar, UFMG (online storage), in order to find articles published between 1950 and 2010 in Portuguese and English languages. The results indicate that there is a strong relationship among religious affiliation, religiosity (even if measured by subjective variables) and adolescent sexual initiation. The articles also reveal a number of ways over the years used to classify religion and religiosity, in addition to the methodological caution that should be taken in studies regarding adolescent sexuality and religion.
    Keywords: Sexual Initiation, Religion, Adolescence, Systematic Literature Review.
    JEL: Y80 Z12
    Date: 2011–08
  8. By: Albers, Scott A.; Albers, Andrew L.
    Abstract: The Long-Wave theories of Nikolai Kondratiev and others claim to find mathematic waves in economic and other social data which are at present in dispute. Currently the theory is considered outside the scope of mainstream economics under several rationales. Despite the lack of mainstream acceptance, we make a strong case for the existence of long waves in the Real GNP of the United States with a 56 year cycle. Our analysis bypasses many of the issues cited by Long-Wave theory critics and in fact clarifies the mathematical structure of the theory.
    Keywords: Real GNP; Golden Mean; Fibonacci Series; Arab Spring; Phi; Long Wave; Long Cycle; Kondratiev Wave; Economic Forecasting; Economic Model; Global Financial Crisis; Constitutional Law; American Economic History; Revolution; Consolidation; GNP Spiral; Okun's Law; “The Great Moderation”
    JEL: E0 B4 C19 E01 E27 C02 E39 K19 E3 N1 K0 O11 C53 A13 E19 E00 B59 E37
    Date: 2011–07–21
  9. By: B.P. Zaaruka; J.W. Fedderke
    Abstract: This paper presents a database on institutional measures for Namibia for the period 1884 to 2008. Using the techniques of principal components and factor analysis in aggregating these indicators, the study does two things. First, it illustrates a methodology for constructing de jure and de facto institutional measures by means of using pieces of legislation and quantitative data, respectively. Secondly, these indicators are used to assess the nature of political and economic institutional transformation from the colonial legacy to the modern outcome using Namibia as a natural experiment. The new indicators while covering a long time period (1884-2008), correlate fairly well with some of the widely used institutional indices produced by the Freedom House and the Heritage foundation.
    Keywords: Namibia Institutional Indicators Political Freedom Property Rights Judicial Independence Political Instability
    JEL: K00 N4 O1
    Date: 2011
  10. By: Stephenson, Sherry (Asian Development Bank Institute); Roberts, Maryse (Asian Development Bank Institute)
    Abstract: Since the early 1990s, regional trade agreements (RTAs) covering trade in services have proliferated, with 95 RTAs on services notified to the World Trade Organization (WTO) under Article V of the General Agreement on Trade in Services (GATS), as of June 2011. This paper discusses how RTAs support or debilitate the GATS in its governance function as the keeper of rules and liberalization commitments on services trade for WTO members. It addresses this question and its implications for governance by focusing on four different issues: architecture; compliance; ability to promote reforms; and actual impact of RTAs in fostering services trade.
    Keywords: regional trade agreements; gats; political economy; trade in services; wto; multilateralizing regionalism
    JEL: F13 F15 F59
    Date: 2011–08–30
  11. By: Andrés Álvarez; Jennifer A. Timoté
    Abstract: Este trabajo estudia la arquitectura de la organización bancaria y monetaria construida en los años 1870s hasta 1880s en Colombia y en particular en el Estado de Cundinamarca y en su capital, Bogotá. Utilizando indicadores financieros de liquidez y solvencia, construidos a partir de los balances mensuales de los bancos, mostramos la existencia de un alto riesgo de liquidez y sus consecuencias durante las crisis políticas. Este texto también busca evidenciar la existencia de episodios de corridas bancarias que no habían sido estudiados bajo esta forma en la literatura y analizar las políticas privadas y públicas que se adoptaron frente a estas situaciones. A partir de correspondencia y artículos de prensa de la época presentamos un estudio detallado y comparativo de las experiencias divergentes de los bancos de Bogotá y de Colombia.
    Date: 2011–07–27
  12. By: Walt, Stephen M. (Harvard University)
    Abstract: Most social scientists would like to believe that their profession contributes to solving pressing global problems. There is today no shortage of global problems that social scientists should study in depth: ethnic and religious conflict within and between states, the challenge of economic development, terrorism, the management of a fragile world economy, climate change and other forms of environmental degradation, the origins and impact of great power rivalries, the spread of weapons of mass destruction, just to mention a few. In this complex and contentious world, one might think that academic expertise about global affairs would be a highly valued commodity. One might also expect scholars of international relations to play a prominent role in public debates about foreign policy, along with government officials, business interests, representatives of special interest groups, and other concerned citizens. Yet the precise role that academic scholars of international affairs should play is not easy to specify. Indeed, there appear to be two conflicting ways of thinking about this matter. On the one hand, there is a widespread sense that academic research on global affairs is of declining practical value, either as a guide to policymakers or as part of broader public discourse about world affairs. On the other hand, closer engagement with the policy world and more explicit efforts at public outreach are not without their own pitfalls. Scholars who enter government service or participate in policy debates may believe that they are "speaking truth to power," but they run the risk of being corrupted or co-opted in subtle and not-so-subtle ways by the same individuals and institutions that they initially hoped to sway. The remainder of this essay explores these themes in greater detail.
    Date: 2011–08
  13. By: James J. Heckman
    Abstract: This paper reviews the problems and potential benefits of integrating personality psychology into economics. Economists have much to learn from and contribute to personality psychology.
    JEL: I2 J24
    Date: 2011–08
  14. By: Kuschminder, Katie (Maastricht Graduate School of Governance, Maastricht University); Hercog, Metka (Maastricht Graduate School of Governance, Maastricht University)
    Abstract: Migrant-sending countries are increasingly exploring schemes where human capital of expatriates can be used for the benefit of the home country's socioeconomic development. This paper focuses on the mechanisms of emigration management and problematizes the government involvement in diaspora engagement. By exploring the two cases of diaspora engagement policies, namely, that of India and Ethiopia, the paper questions the success of government mechanisms, establishing the conditions under which these mechanisms lead to political and economic benefit from the diaspora. Although countries differ immensely in various aspects, Ethiopia modeled its diaspora policy after the case of India, which provides us with a good case for establishing the necessary conditions. Both countries see diaspora as a key resource in economic development of respective countries and have therefore invested significant resources into developing institutions and policies to engage diaspora. Nevertheless, there are some major differences between the countries, in terms of the countries' resources and capacities to design and implement diaspora engagement policies and also in the composition of migrant communities. While Indian migration has always had an economic component, the Ethiopian Diaspora is primarily characterized by refugee flows. Moreover, India has a long history of migration and one of the largest migrant communities in the world. The paper argues that government resources and capacities to design and implement policies and the composition of migrant communities play a key role in determining the approach governments adopt with their diasporas.
    Keywords: diaspora, migration, diaspora engagement policy, diaspora engagement, institutions, India, Ethiopia
    JEL: J61
    Date: 2011
  15. By: Gerlach, Stefan; Jordan, Thomas J.
    Abstract: This paper reviews the tactics and strategy of monetary policy in Switzerland, using a selection of Benjamin Friedman’s papers to organize the discussion, and starting in the early 1970s, when his academic papers started to appear in scholarly journals. The review focuses on the SNB’s experience with monetary targets in 1975-1999, the policy strategy adopted by the SNB in 2000, and the SNB’s experiences during the financial crisis that started in August 2007. On many occasions, Benjamin Friedman’s and the SNB’s thinking converge, while on others, they diverge.
    Keywords: financial crisis; inflation targeting; monetary policy; monetary targeting; Swiss National Bank
    JEL: E43 E53 E58
    Date: 2011–08
  16. By: Boettke, Peter
    Abstract: In the 2011 Franz Cuhel Memorial Lecture, I argue that the study of endogenous rule formation in economic life (what I term the positive political economy of anarchism) should be studied in-depth and that the economic analysis of the Austrian school of economics provides many of the key analytical insights necessary for such study.
    Keywords: Rule formation; Enterprise of Law; Austrian Economics
    JEL: O17 B41 B53 P16
    Date: 2011
  17. By: Kent Grote (Department of Economics and Business, Lake Forest College); Victor Matheson (Department of Economics, College of the Holy Cross)
    Abstract: This paper presents an annotated bibliography of all papers relating to the economics of lotteries as of early to mid 2011. All published scholarly papers that could be identified by the authors are included along with the published abstract where available.
    Keywords: lotto, lottery, public finance, gambling
    JEL: D81 H71 L83
    Date: 2011–08
  18. By: Erixon, Lennart Erixon (Dept. of Economics, Stockholm University)
    Abstract: The new economic-policy regime in Sweden in the 1990s included deregulation, central-bank independence, inflation targets and fiscal rules but also active labour market policy and voluntary incomes policy. This article describes the content, determinants and performance of the new economic policy in Sweden in a comparative, mainly Nordic, perspective. The new economicpolicy regime is explained by the deep recession and budget crisis in the early 1990s, new economic ideas, EU integration and the power of economic experts. In the 1998-2007 period, Sweden displayed relatively low inflation and high productivity growth, but unemployment was high, especially by national standards. The restrictive monetary policy was responsible for the low inflation and the dynamic ICT sector was decisive for the productivity miracle. Furthermore, productivity increases in the ICT sector largely explains why the Central Bank undershot its inflation target in the late 1990s and early 2000s. The new economic-policy regime in Sweden performed well during the global financial crisis. However, as in other OECD countries the moderate increase in unemployment was largely attributed to labour hoarding. And the rapid recovery of the Baltic countries made it possible for Sweden to avoid a bank crisis.
    Keywords: Swedish model; Swedish economic policy; Swedish Central Bank; economic experts; Sweden’s macroeconomic performance; financial crisis; new economic-policy regime
    JEL: D78 E24 E31 E58 E62 E63 E64 J51 N14 O47 O50
    Date: 2011–08–30

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.