New Economics Papers
on Business, Economic and Financial History
Issue of 2012‒02‒01
twenty-one papers chosen by

  1. The human capital of Central-Eastern and Eastern Europe in European perspective By Jörg Baten; Mikolaj Szoltysek
  2. The Emergence of Modern Banking System in the Philippines during the American Colonial Period By Yoshiko Nagano
  3. A Historical Review of the Beer Economy By Poelmans, Eline; Swinnen, Johan
  4. From Divergence to Convergence: Re-evaluating the History Behind China's Economic Boom By Loren Brandt; Debin Ma; Thomas G. Rawski
  5. Turning Points in Leadership: Shipping Technology in the Portuguese and Dutch Merchant Empires By Claudia Rei
  6. Is Tanzania a Success Story? A Long Term Analysis By Sebastian Edwards
  7. War and Stature: Growing Up During the Nigerian Civil War By Richard Akresh; Sonia Bhalotra; Marinella Leone; Una Osili
  8. Political Ideology and Economic Growth in a Democracy : The French Experience, 1871 - 2009. By François Facchini; Mickaël Melki
  9. Asia 2050: Realizing the Asian Century: Overview By Harinder Kohli; Ashok Sharma; Anil Sood; Haruhiko Kuroda
  10. A chronology of turning points in economic activity: Spain, 1850-2011 By Travis J. Berge; Òscar Jordà
  11. Bourbaki's Destructive Influence on the Mathematization of Economics By K. Vela Velupillai
  12. The evolution of Alexandre Lamfalussy's thought on the international and European monetary system (1961-1993) By Ivo Maes
  13. The Philippine National Bank and Lending in Agriculture: 1916-1930 By Yoshiko Nagano
  14. Oil Prices, Exhaustible Resources, and Economic Growth By James D. Hamilton
  15. From Russia with Love: The Impact of Relocated Firms on Incumbent Surv ival By Falck, Oliver; Guenther, Christina; Heblich, Stephan; Kerr, William R.
  16. Valuing the Vote: The Redistribution of Voting Rights and State Funds Following the Voting Rights Act of 1965 By Elizabeth U. Cascio; Ebonya L. Washington
  17. The economics and philosophy of globalization By Yazdani, Naveed; Mamoon, Dawood
  18. Microfinanzas en México: Estudio By Banco Interamericano de Desarrollo (BID); Marulanda Consultores; Development Alternatives Inc. (DAI)
  19. Corporate social responsibility and management control By Mersereau, Alexander; Mottis, Nicolas
  20. The effect of labour taxes on labour demand: a comparison between Belgium and neighbouring countries By Laenen, Wout; Moons, Cindy; Persyn, Damiaan
  21. Director Histories and the Pattern of Acquisitions By Peter Rousseau; Caleb Stroup

  1. By: Jörg Baten; Mikolaj Szoltysek (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: We trace the development of numeracy in Poland and Russia from the early 17th century onwards, and numeracy in Belarus, Ukraine, and Lithuania from the 18th century onwards. The fact that western Poland was doing relatively well during the 16th and early 17th centuries, but was not able to converge to Western European levels during the 17th, 18th, and early 19th centuries, and even fell back relative to Southern Europe during this period, might support the hypothesis that the second serfdom development was one of the core factors delaying Eastern European human capital accumulation. The major wars in the region also had a devastating effect on numeracy levels.
    JEL: J1 Z0
    Date: 2012–01
  2. By: Yoshiko Nagano
    Abstract: This paper aims to map the emergence and development of modern banking system in the Philippines during the American colonial period. First, the Philippine foreign trade structure under American rule is briefly surveyed. Second, the process of the enactment of various banking laws and the characteristics of such laws are examined. Third, the emergence and development of the modern banking sector is traced to their important beginnings and tracked in their later stages, and fourth, the roles of foreign exchange banks, commercial banks, and government banks in the export economy are discussed through a critical consideration of certain and exemplary case studies.
    Date: 2011–12
  3. By: Poelmans, Eline (Hogeschool-Universiteit Brussel (HUB), Belgium); Swinnen, Johan (LICOS Centre for Institutions and Economic Performance, Katholieke Universiteit Leuven, Belgium)
    Abstract: This article reviews beer production, consumption and the industrial organization of breweries throughout history. Monasteries were the centers of the beer economy in the early Middle Ages. Innovation and increased demand later induced the growth of commercial breweries. Globalization and scientific discoveries transformed the beer industry and increased competition from the 16th through the 19th century. The 20th century was characterized by dramatic (domestic and international) consolidation, major shifts in consumption patterns, and the re-emergence of small breweries.
    Keywords: economic history; history of beer; monasteries; innovation and taxation in brewing; modern brewing; consolidation and globalization
    JEL: N30 N40 L23 L66
    Date: 2011–10
  4. By: Loren Brandt; Debin Ma; Thomas G. Rawski
    Abstract: China's long-term economic dynamics pose a formidable challenge to economic historians. The Qing Empire (1644-1911), the world's largest national economy prior to the 19th century, experienced a tripling of population during the 17th and 18th centuries with no signs of diminishing per capita income. In some regions, the standard of living may have matched levels recorded in advanced regions of Western Europe. However, with the Industrial Revolution a vast gap emerged between newly rich industrial nations and China's lagging economy. Only with an unprecedented growth spurt beginning in the late 1970s has the gap separating China from the global leaders been substantially diminished, and China regained its former standing among the world's largest economies. This essay develops an integrated framework for understanding this entire history, including both the long period of divergence and the more recent convergent trend. The analysis sets out to explain how deeply embedded political and economic institutions that had contributed to a long process of extensive growth subsequently prevented China from capturing the benefits associated with new technologies and information arising from the Industrial Revolution. During the 20th century, the gradual erosion of these historic constraints and of new obstacles created by socialist planning eventually opened the door to China's current boom. Our analysis links China's recent economic development to important elements of its past, while using the success of the last three decades to provide fresh perspectives on the critical obstacles undermining earlier modernization efforts, and their removal over the last century and a half.
    Date: 2012–01
  5. By: Claudia Rei (Department of Economics, Vanderbilt University)
    Abstract: This paper focuses on the implications of organizational control on the race for economic leadership across merchant empires. Poor organizational choices reduce incentives to invest, which in turn stifle technological improvements and make leading empires lag behind new entrants. Using historical evidence on shipping technology, I show that this may have been a factor behind the loss of leadership of the Portuguese merchant empire in the late sixteenth century.
    Keywords: Merchant empires, Shipping technology, Organization
    JEL: N23 N73 O14
    Date: 2011–10
  6. By: Sebastian Edwards
    Abstract: The purpose of this paper is to provide a historical perspective on the reform process initiated in Tanzania in 1986, and deepened in 1996. In order to do this I concentrate mostly on the period spanning from 1967, when the Arusha Declaration was adopted by the official political party the TANU, and 1996, when a new approach towards foreign aid was implemented. I am particularly interested in investigating how external aid affected Tanzania during the early years, and how it contributed to the demise of the economy in the 1970s and 1980s. I also analyze the role played by foreign aid in the subsequent (after 1996) recovery of the country. I emphasize both technical as well as political economy issues related to imbalances, disequilibria, devaluation, black markets, adjustment, and reform. Because of the emphasis on foreign aid and macroeconomics, I pay special attention to three important episodes in Tanzania’s economic history: (a) the exchange rate crisis of the late 1970’s and early 1980s; (b) the IMF Stand-by Program and the maxi-devaluation of 1986; and (c) The serious impasse between donors and the Tanzanian authorities in the mid 1990s. At the end of the analysis I ask whether Tanzania is, as officials from the multilateral institutions have claimed repeatedly, a “success story.”
    JEL: F31 F32 G01 N17 N72 O55
    Date: 2012–01
  7. By: Richard Akresh; Sonia Bhalotra; Marinella Leone; Una Osili
    Abstract: The Nigerian civil war of 1967-70 was precipitated by secession of the Igbo-dominated south-eastern region to create the state of Biafra. It was the first civil war in Africa, the predecessor of many. We investigate the legacies of this war four decades later. Using variation across ethnicity and cohort, we identify significant long run impacts on human health capital. Individuals exposed to the war at all ages between birth and adolescence exhibit reduced adult stature and these impacts are largest in adolescence. Adult stature is portentous of reduced life expectancy and lower earnings.
    Keywords: war, height, early life, human capital investments, Nigeria.
    JEL: I12 O12 J13
    Date: 2011–12
  8. By: François Facchini (Centre d'Economie de la Sorbonne); Mickaël Melki (Centre d'Economie de la Sorbonne)
    Abstract: This paper examines the influence of political ideology on economic growth in the French democracy since 1871. It does so by addressing three main issues : the property and the reliability of a political ideology index in the long-run, the robustness of the relationship between ideology and growth and the specific channels through which political ideology affects economic performance. The main conclusion is that, compared with right-wing parties in power, left-wing governments have promoted equity at the expense of economic growth. It also appears that the main channel through which political ideology has impacted economic performance all along the French democratic experience is the budgetary tool (i.e. fiscal and redistributive policies) which influenced employment and income inequalities. By contrast, there seems to be less or even no empirical support for explanations based on the monetary policy or regulation, such as trade policies or the labor market regulation.
    Keywords: French economic history, 19th century, 20th century, political ideology, partisanship, growth, government performance, fiscal policy, public spending, unemployment, inequality.
    JEL: E6 O43 H11 N13
    Date: 2012–01
  9. By: Harinder Kohli (Centennial Group International and the Emerging Markets Forum); Ashok Sharma (Asian Development Bank); Anil Sood (Centennial Group International and the Emerging Markets Forum); Haruhiko Kuroda (Asian Development Bank)
    Date: 2011–05
  10. By: Travis J. Berge; Òscar Jordà
    Abstract: This paper codifies in a systematic and transparent way a historical chronology of business cycle turning points for Spain reaching back to 1850 at annual frequency, and 1939 at monthly frequency. Such an exercise would be incomplete without assessing the new chronology itself and against others —this we do with modern statistical tools of signal detection theory. We also use these tools to determine which of several existing economic activity indexes provide a better signal on the underlying state of the economy. We conclude by evaluating candidate leading indicators and hence construct recession probability forecasts up to 12 months in the future.
    Date: 2011
  11. By: K. Vela Velupillai
    Abstract: The first appearance of a reference to a Bourbaki mathematical result was the spoof by D.D. Kosambi, published in the first volume of the Bulletin of the Academy of Sciences of the United Provinces of Agra and Oudh, eighty years ago, although it was not the first reference to Bourbaki in a mathematical context. In mathematical economics there seems to be an increasing identification of Debreu’s mathematization of economics with Bourbakism, although the Post WW II mathematics of general equilibrium theory can be shown to be consistent also with the contributions of the Polish School of Mathematics in the interwar period. In this paper an attempt is made to summarise the story of the emergence of Bourbakism, originating in India, and its recent demise as well as how it played a destructive role in mathematising economics in one, uncompromisingly nonconstructive, mode.
    Keywords: Bourbakism, Polish School of Mathematics, Hilbert’s Dogma, Debreu, Mathematical Economics.
    JEL: B23 C02 C69 D50
    Date: 2012
  12. By: Ivo Maes (National Bank of Belgium, Research Department; Université catholique de Louvain, Robert Triffin Chair; HUBrussel; ICHEC Brussels Management School)
    Abstract: The establishment of the European Monetary Institute (EMI), the predecessor of the European Central Bank, on 1 January 1994, was a milestone in the process of European monetary integration. In this paper, we look at the work on the international and European monetary system of Alexandre Lamfalussy, its first president. Lamfalussy pursued a threefold career: as a private banker, a central banker and an academic. Partly under the influence of Robert Triffin, Lamfalussy soon became interested in international monetary issues. This paper analyses his views on the international monetary system and on European monetary integration, including his contributions to the Delors Report, which provided the framework for European monetary union. The paper draws extensively on archival research in the Lamfalussy papers at the Bank for International Settlements and the minutes of the EEC Committee of Governors' meetings. The paper provides not only an analysis of Lamfalussy's thought on European monetary integration, but also offers crucial insight into the Weltanschauung and way of thinking of European central bankers in this period.
    Keywords: Lamfalussy, exchange rates, European monetary integration, Delors Report
    JEL: B31 E42 F36
    Date: 2011–11
  13. By: Yoshiko Nagano
    Abstract: This paper examines the distinctive features of the Philippine National Bank, particularly through its lending practices in agriculture. First by examining the enactment and revision of the National Bank Act, the Bank's characteristics as an organization and operations are discussed. Second, the process by which the Bank began its operations and administration of agricultural loans is traced. Third, the 1918 dispute over lending in agriculture is depicted as a striking example of the nature of its banking operations, before presenting the dual structure of agricultural loans provided by the National Bank as the conclusion.
    Date: 2011–12
  14. By: James D. Hamilton
    Abstract: This paper explores details behind the phenomenal increase in global crude oil production over the last century and a half and the implications if that trend should be reversed. I document that a key feature of the growth in production has been exploitation of new geographic areas rather than application of better technology to existing sources, and suggest that the end of that era could come soon. The economic dislocations that historically followed temporary oil supply disruptions are reviewed, and the possible implications of that experience for what the transition era could look like are explored.
    JEL: O40 Q30 Q41 Q43
    Date: 2012–01
  15. By: Falck, Oliver; Guenther, Christina; Heblich, Stephan; Kerr, William R.
    Abstract: We identify the impact of local firm concentration on incumbent performance with a quasi natural experiment. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet occupied zone to prevent expropriation. We show that the regional location decisions of these firms upon moving to western Germany were driven by non-economic factors and heuristics rather than existing industrial conditions. Relocating firms increased the likelihood of incumbent failure in destination regions, a pattern that differs sharply from new entrants. We further provide evidence that these effects are due to increased competition for local resourc es.
    Keywords: Germany; labor; firm dynamics; competition; Agglomeration
    Date: 2011–07
  16. By: Elizabeth U. Cascio; Ebonya L. Washington
    Abstract: The Voting Rights Act of 1965 (VRA) has been called one of the most effective pieces of civil rights legislation in US history, having generated dramatic increases in black voter registration and black voter turnout across the South. We show that the expansion of black voting rights in some southern states brought about by one requirement of the VRA – the elimination of literacy tests at voter registration – was accompanied by a shift in the distribution of state aid toward localities with higher proportions of black residents, who held newfound power to affect the reelection of state officials, a finding that is consistent with models of distributive politics. Our estimates imply an elasticity of state transfers to counties with respect to turnout in presidential elections – the closest available measure of enfranchisement – of roughly one.
    JEL: D72 H7 I2 J15 N32
    Date: 2012–01
  17. By: Yazdani, Naveed; Mamoon, Dawood
    Abstract: The economics and philosophy of Globalization are generally not discussed together. This paper assesses the claims of economic prosperity through economic integration in the backdrop of cultural, political and social value system implications of Globalization. This debate becomes important when we see a major part of developing world still struggling with impoverishment while cheerleaders of Globalization already claim a success story out of increased integration of developed and developing economies post 1980s.
    Keywords: Globalization; Macroeconomic Policy; Economic Integration; Postmodernism
    JEL: F01 P1
    Date: 2012–01–20
  18. By: Banco Interamericano de Desarrollo (BID); Marulanda Consultores; Development Alternatives Inc. (DAI)
    Abstract: El propósito de este documento es ofrecer una mirada de amplio alcance al desarrollo de la industria de las microfinanzas, con el fin de determinar sus orígenes históricos, sus características actuales y los retos que enfrenta para lograr asegurar su sostenibilidad a largo plazo. Su objetivo es aportar elementos que propicien una discusión interna que conduzca a evaluar la situación actual y las acciones que demanda el fortalecimiento de la industria a futuro, para lo cual se realizó una revisión de las fuentes secundarias de información disponibles sobre el mercado mexicano, tanto dentro del ámbito más amplio del desarrollo del sistema financiero como específicamente alrededor de la evolución de las instituciones microfinancieras, buscando entender los antecedentes históricos que sirven de base para comprender la situación actual del sector de microfinanzas de México. Además, se realizaron entrevistas con representantes de distintas IMF, así como a autoridades y expertos conocedores, con el fin de tener una visión más completa y actualizada de la situación del mercado de las microfinanzas en México.
    Keywords: Sector privado :: Microempresas y microfinanciamiento, Sector financiero :: Servicios financieros, IMF, microcrédito, mesoamérica, mipyme
    Date: 2011–03
  19. By: Mersereau, Alexander (HEC Montreal); Mottis, Nicolas (ESSEC Business School)
    Abstract: This paper focuses on the management control processes associated with Corporate Social Responsibility (CSR) issues management in organisations. Following a review of the literature related to management control and CSR, we use a case example of a leading European insurance company to explore the extent and nature of management control for CSR.
    Keywords: Management; control
    JEL: M14
    Date: 2012–01–20
  20. By: Laenen, Wout; Moons, Cindy (Hogeschool-Universiteit Brussel (HUB), Belgium); Persyn, Damiaan (LICOS and VIVES, KULeuven, Faculty of Business and Economics, Leuven, Belgium)
    Abstract: This study examines the evolution of labour costs and taxes in Belgium and neighbouring countries. We try to clarify the common issues in the current debate concerning labour costs and labour demand in Belgium and neighbouring countries and investigate the influence of labour costs on employment by using macroeconomic OECD data. We conclude that the tax wedge in Belgium is one of the highest of all OECD countries. Labour costs in Belgium rose at a moderate tempo, but labour productivity evolved less favourably compared with neighbouring countries. Belgian unit labour costs, considered as an indicator of competitiveness, evolved unfavourably. By using a dynamic error correction model we find a statistically significant but limited negative relation between labour costs and employment. A decrease in labour costs of 10% results in an increase of employment of only 1.3%, which indicates a strongly inelastic labour demand. In contrast to studies based on microeconomic data, which find generally higher wage elasticities, on the basis of this study no decisive elements can be found to question the rationale of the current wage indexation mechanism.
    Keywords: economic history; ECSC; European Integration; regional concentration
    Date: 2011–09
  21. By: Peter Rousseau (Department of Economics, Vanderbilt University); Caleb Stroup (Department of Economics, Vanderbilt University)
    Abstract: We trace directors through time and across firms to study whether acquirers' exposure to non-public information about potential targets through board service histories affects the market for corporate control. In a sample of publicly-traded U.S. firms from 1996 through 2006, we find that acquirers are about five times more likely to buy firms at which their directors once served. These effects are stronger when the acquirer has better corporate governance, the director has a larger ownership stake at the acquirer, or the director played an important role during past service at the target. The findings are robust to endogeneity of board composition and to controls for network connectivity and conventional inter-firm interlocks.
    Keywords: Interlocking directorates, board networks, mergers, social networks, corporate governance
    JEL: G34
    Date: 2011–10

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