Law, Politics and Financial Development: The Great Reversal of the U.K. Corporate Debt Market

This article examines the role of creditor protection in the development of the U.K. corporate bond market. This market grew rapidly in the late nineteenth century, but in the twentieth century it experienced a reversal, albeit with a short-lived post-1945 renaissance. Such was the extent of the reversal that the market from the 1970s onwards was smaller than it had been in 1870. We find that law does not explain the variation in the size of this market over time. Alternatively, our evidence suggests that inflation and taxation policies were major drivers of this market in the post-1945 era. Copyright © The Economic History Association 2013

Raiffeisenism abroad: why did German cooperative banking fail in Ireland but prosper in the Netherlands?

Why did imitations of Raiffeisen’s rural cooperative savings and loans associations work well in some European countries, but fail in others? This article considers the example of Raiffeisenism in Ireland and in the Netherlands. Raiffeisen banks arrived in both places at the same time, but had drastically different fates. In Ireland they were almost wiped out by the early 1920s, while in the Netherlands they proved to be a long-lasting institutional transplant. Raiffeisen banks were successful in the Netherlands because they operated in niche markets with few competitors, while rural financial markets in Ireland were unsegmented and populated by long- established incumbents, leaving little room for new players, whatever their institu- tional advantages. Dutch Raiffeisen banks were largely self-financing, closely integrated into the wider rural economy, and able to take advantage of economic and religious divisions in rural society. Their Irish counterparts were not.

Political Extremism in the 1920s and 1930s: Do German Lessons Generalize?

We examine the impact of the Great Depression on the share of votes for right-wing extremists in elections in the 1920s and 1930s. We confirm the existence of a link between political extremism and economic hard times as captured by growth or contraction of the economy. What mattered was not simply growth at the time of the election, but cumulative growth performance. The impact was greatest in countries with relatively short histories of democracy, with electoral systems that created low hurdles to parliamentary representation, and which had been on the losing side in World War I.

Government decisions before and during the First World War and the living standards in Germany during a drastic natural experiment

The First World War hit Germany severely, particularly the agricultural sector, because the outbreak came unexpected and its duration exceeded all expectations. Many resources necessary for agricultural production were required by the war economy and led to shortages and shrinking supplies. Many agricultural laborers were drafted and the blockade imposed by the allies prevented Germany from a great deal of imports. As a consequence, the nutritional situation was devastating, particularly after 1916, and hit all groups of the German society. The period under observation provides one of most drastic natural experiments in the 20th century. This study uses anthropometric data from German soldiers who served in the Second World War to trace living standards between the 1900s and the 1920s. In contrast to other approaches, this paper is able to distinguish between social groups by occupation, religious denominatio\n, regional origin, and city size. The results suggest that although all social strata were hit by famine conditions, the height of farmers, urban citizens, Catholics, and especially individuals born in the highly integrated food-import regions along the coast and the banks of the Rhine declined most.

War, food rationing, and socioeconomic inequality in Germany during the First World War

Germany experienced a devastating period during the First World War due to severely restricted import possibilities and a general shortage of foodstuffs. This study uses the heights of some 4,000 individuals who served during the Second World War to quantify biological living standards from the 1900s to the 1920s, and focuses primarily on socioeconomic inequality during this period. The results suggest that generally the upper social strata, measured by fathers' occupation, exhibited the tallest average height, followed by the middle and lower classes. These socioeconomic differences became more pronounced during the First World War when the rationing system provided a limited food supply. Wealthier individuals were able to purchase additional foodstuffs on black markets. Therefore, children from upper-class families experienced only a small decline in average height compared to their counterparts from the middle and lower social strata.

Growing Tall but Unequal: New Findings and New Background Evidence on Anthropometric Welfare in 156 Countries, 1810–1989

This is the first initiative to collate the entire body of anthropometric evidence during the 19th and 20th centuries, on a global scale. By providing a comprehensive dataset on global height developments we are able to emphasize an alternative view of the history of human well-being and a basis for understanding characteristics of well-being in 156 countries, 1810–1989.

Why are you tall while others are short? Agricultural production and other proximate determinants of global heights

We analyze the proximate determinants of the biological standard of living from a global perspective, namely high-quality nutrition and the disease environment during the nineteenth and twentieth centuries. Until the mid-twentieth century, the local availability of cattle, meat, and milk per capita and the local disease environment mainly determined the stature of the population – and, by implication, how long they lived and how healthy they were. During the late twentieth century, the trade of agricultural products and health-promoting technologies increased in relative importance; hence, the local availabilities became less decisive in explaining height differences.

Empirical testing of genuine savings as an indicator of weak sustainability: a three-country analysis of long run trends

Genuine Savings has emerged as a widely-used indicator of sustainable development. In this paper, we use long-term data stretching back to 1870 to undertake empirical tests of the relationship between Genuine Savings (GS) and future well-being for three countries: Britain, the USA and Germany. Our tests are based on an underlying theoretical relationship between GS and changes in the present value of future consumption. Based on both single country and panel results, we find evidence supporting the existence of a cointegrating (long run equilibrium) relationship between GS and future well-being, and fail to reject the basic theoretical result on the relationship between these two macroeconomic variables. This provides some support for the GS measure of weak sustainability. We also show the effects of modelling shocks, such as World War Two and the Great Depression.

Predicting the past: Understanding the causes of bank distress in the Netherlands in the 1920s

Why do some banks fail in financial crises while others survive? This article answers this question by analysing the effect of the Dutch financial crisis of the 1920s on 142 banks, of which 33 failed. We find that choices of balance sheet composition and product market strategy made in the lead-up to the crisis had a significant impact on banks’ subsequent chances of experiencing distress. We document that high-risk banks – those operating highly-leveraged portfolios and attracting large quantities of deposits – were more likely to fail. Branching and international activities also increased banks’ default probabilities. We measure the effects of board interlocks, which have been characterized in the extant literature as contributing to the Dutch crisis. We find that boards mattered: failing banks had smaller boards, shared directors with smaller and very profitable banks and had a lower concentration of interlocking directorates in non-financial firms.