#Econhist papers I (mostly) admire, Sep 2023
On Songlines in Australia, the flu in Germany, the Mexican Revolution, rice farming in China, and much more...
In this second instalment of economic history papers I (mostly) admire, I review papers on the economic histories of Senegal, Australia, China, Germany, Mexico, Mozambique and more.
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1. Emancipation in Senegal
Let’s start this month with a new paper by Bronwen Everill and Khadidiatou Diedhiou in Business History Review on emancipation and compensation in Senegal.
Five-point summary:
The paper explores how the compensation process for slaveholders during emancipation influenced economic transitions in Senegal, particularly in comparison to other contexts like metropolitan British and French colonies.
The paper asks three main questions: How did compensation for slaveholding families in Senegal influence their economic stability post-emancipation? How did this process differ from other colonial contexts, especially in British colonies? What role did compensation play in transitioning from a slave-based credit model to other forms of business financing?
The authors find that the compensation process allowed many larger slaveholding families in Senegal to smoothly transition to other forms of capital investment, such as real estate and commodities like groundnuts. Unlike in other contexts, the compensation offered to African slaveholders was unique to Senegal’s Saint-Louis and Gorée regions, enabling these families to adapt more readily to the abolition of slavery. The continuation of enslaved labour beyond the colony’s borders allowed urban and rural elites flexibility in exchange, debt, labour, and credit, further facilitating business expansion.
The paper reveals that compensation practices played a significant role in Senegal’s economic transition following emancipation. It challenges the conventional wisdom that focuses primarily on British and French metropolitan contexts, offering new insights into how African slaveholders navigated post-emancipation economic challenges.
The study suggests that understanding the mechanisms of compensation can offer valuable perspectives on how communities adapt to systemic economic changes. It also calls into question universal narratives about emancipation, revealing the need for more context-specific studies.
My takeaway: How both slaveholders and the enslaved adjusted to their new post-emancipation reality is a fascinating topic, also for those of us studying Cape slavery, because it exposes slavery as not just an institution of forced labour but also as a complex financial system intertwined with various forms of capital, credit, and investment. Because slaveowners were also black Africans, the case of Senegal adds a layer of complexity to the standard narrative around slavery and emancipation, challenging simplistic notions of racial dynamics in the institution of slavery.
2. Australia’s Aboriginal trading routes
A fantastically innovative new working paper by Sotiris Kampanelis, Aldo Elizalde and Yannis M. Ioannides investigates the persistence of Aboriginal Australians’ trading routes.
Five-point summary:
The authors sought to understand how Aboriginal trade routes in Australia, known as Songlines, influenced European exploration, settlement, and modern urbanisation and economic activity. It aimed to reveal whether Europeans’ use of indigenous knowledge has shaped the contemporary spatial and economic landscape of Australia.
The authors empirically demonstrate that Europeans used Aboriginal trading paths for exploration and settlement, leading to increased connectivity and economic activity along these routes. The presence of an Aboriginal trade route increased the probability of observing economic activity by 3.5%.
The influence of Songlines not only shaped early European settlements but also continues to significantly affect the geographical contours of urbanisation and economic activity in contemporary Australia. This impact remained statistically significant even after controlling for various geographical, climatic, and historical factors.
This work is the first comprehensive study that shows the long-term impact of pre-colonial trade routes across an entire continent. It adds to the literature on urban development, colonial influence, and the long-term effects of historical trade routes. It focuses on societies where economic interactions were paramount despite a lack of state or physical infrastructure.
The study’s findings underscore the importance of indigenous knowledge in shaping the historical and contemporary landscape of Australia. It reveals a complex relationship between pre-colonial institutions, colonial practices, and modern outcomes, adding to a growing body of literature that examines the persistence of historical events in shaping current realities.
My takeaway: Given the lack of conventional archival sources, economic historians are forced to be creative to contribute to debates about the precolonial economy and its persistence into the colonial period. This is a great demonstration of how innovative methods and interdisciplinary approaches can be employed to uncover the historical connections that still shape modern economies.
3. The Spanish flu in Germany
Although Covid-19 reignited interest in the Spanish flu, a new paper by economic historians Stefan Bauernschuster, Matthias Blum, Erik Hornung and Christoph Koenig highlights its political consequences.
The study explores the influence of the 1918 Spanish flu pandemic on voting patterns in Germany, mainly focusing on the shift in support for left-wing parties. The researchers investigated whether flu mortality affected voters' choices, connecting these changes to the parties' reputation for competence in public health.
Findings revealed a lasting shift towards left-wing parties in areas with higher flu mortality, with specific support for parties known for their public health competence. The results support the 'issue ownership' theory, where voters align with parties seen as experts in critical issues like health, and ruled out changes in socio-economic conditions as the cause.
The research contrasts with other analyses of health crises, including Covid-19, where government responses usually shape voting patterns. In the case of the 1918 pandemic in Germany, expertise in health matters rather than retrospective voting or government performance appeared to influence voter preference.
The study contributes to understanding the political impact of health crises by focusing on perceived competence rather than punishment for past performance. It highlights the unique consequences of the 1918 pandemic in Germany and offers a comparison with other nations and contemporary pandemics.
Lastly, the paper provides insights into factors that stabilised the fragile democracy of Weimar Germany, offering a fresh perspective on the rise and stabilisation of political ideologies during a tumultuous historical period.
My takeaway: One thing the burgeoning literature on the impact of the flu can agree on is that it was far more idiosyncratic than economists would have expected; large effects in some countries (or even regions within countries) disappear elsewhere. I suspect the same is true for political consequences, as the comparison here with Covid-19 demonstrates. History is never as simple as we would want it to be.
4. The telegraph and elections
I am a big fan Tianyi Wang’s job-market paper, and it seems like he has produced another outstanding contribution, now an NBER working paper.
Five-point summary:
The paper explores the impact of the introduction of the electric telegraph on electoral politics in mid-19th century America, particularly its effect on voter turnout and the type of news covered in newspapers.
Access to telegraphed news from Washington, D.C. led to an increase in voter turnout in presidential elections. Specifically, a one standard deviation reduction in the ‘effective distance to Washington’ (about 260 miles) increased voter turnout by approximately 3.2 percentage points.
The increase in voter turnout did not significantly affect party vote shares or Congressional activities (e.g., roll call votes, number of bills introduced).
Newspapers in areas with better telegraph access shifted their content to cover more national political news, increasing the coverage of topics like Congress, the presidency, and slavery by about 5-10%.
The paper adds to existing literature by being the first to empirically study the political impacts of the telegraph using a detailed dataset. It also enriches our understanding of how technological advancements like the telegraph can influence democratic participation and political information flow.
My takeaway: Technology shapes more than just our incomes; it affects what we believe, how we behave, and how we vote. Understanding how technology influences our voting behaviour, and why, is an important area of research, especially as the speed of technological change increases.
5. Fan-Tastic cooperation
Apologies to non-South Africans baffled by the heading. (Tastic is a rice brand in South Africa.) A new paper in The Economic Journal by Xiaoyu Zhou, Theodore Alysandratos and Michael Naef shows how rice cultivation in China explains the origins of social cooperation.
Five-point summary:
The study investigates the long-term effects of traditional wetland rice farming in China on contemporary cooperative and punishment behaviours, comparing subjects from rice and non-rice provinces and utilising various experimental and behavioural methods.
The study found a robust effect of wetland rice farming on cooperative behaviour, with individuals from rice prefectures contributing more in public goods games and being more predisposed to punish free-riders. The results were consistent across different control measures, including migration patterns and regional differences, and were supported by additional data like Wikipedia contributions and surveys on public goods.
The study also showed that the influence of wetland rice cultivation on cooperative behaviour is likely direct rather than mediated via social or thinking styles. The research ruled out alternative interpretations and potential threats to inference, adding depth to the understanding of how agricultural legacies shape social dynamics.
The paper adds to a growing body of work that explores the psychological and social effects of rice cultivation, providing the first empirical evidence of a connection between wetland rice farming and cooperative as well as punishment behaviour.
By documenting differences in cooperation and punishment within China, the paper adds to the literature on how social preferences and beliefs can vary systematically within a country controlled by similar political, linguistic, and educational backgrounds.
My takeaway: Our prosperity is the result of trust and cooperation. Understanding the roots of such cooperation – and why it would not emerge – seems like a worthwhile exercise.
6. Agriculture and global trade
Staying on the topic of agriculture, a new paper in the Journal of Political Economy (Farid Farrokhi and Heitor S. Pellegrina) shows how trade shifted agricultural production from traditional, labour-intensive technologies to modern, input-intensive ones, boosting growth and welfare.
Five-point summary:
There has been a significant shift in agricultural practices, productivity, and welfare around the world, sparking interest in understanding the underlying mechanisms, particularly in the context of technology adoption and the role of trade in agricultural inputs and outputs.
Two main questions are addressed: (a) What were the consequences of the fall of trade barriers (“globalization”) on technology adoption, agricultural productivity, and global welfare? (b) How was productivity growth in the production of agricultural inputs transmitted across international borders through trade, and what was the relative importance of foreign and domestic sources?
Global reductions in trade costs led to a 6.5% increase in food consumption and a 3.3% rise in welfare, with effects in individual countries as large as 10%-15%. Mechanisms on the input side (technology adoption) were found to be as quantitatively important as those on the output side (international crop specialization), with distinct distributional implications for different income levels of countries.
International trade contributed to sharing the benefits of productivity growth in the agricultural input sector across borders, accounting for around 35% of the welfare gains for the average country, though benefits were substantially lower for low-income countries.
The research introduces technology choices into general equilibrium models of agricultural trade, providing a robust and flexible framework that aligns with real-world data. The framework extends previous models by incorporating new sources of trade gains and offering a unique evaluation of globalization's effects on agricultural productivity.
My takeaway: In an era of trade fragmentation and perhaps even deglobalisation, it is good to be reminded of the remarkable improvements in living standards that international trade has bestowed.
7. Child labour in Portugal’s African colonies
Pedro Vaz Goulart has a fascinating paper in Economic History of Developing Regions on the extent to which child labour was used in Portugal’s African colonies.
Five-point summary:
The article aims to fill a significant gap in historical scholarship by exploring the often-overlooked issue of child labour in Portuguese colonies in Africa—specifically in Angola, Mozambique, and São Tomé and Príncipe—during the 19th and 20th centuries.
The study seeks to answer how children were involved in labour during the Portuguese colonial period, what roles they played, what kinds of labour they were subjected to, and how they responded to these conditions.
Findings indicate that children were often used to support or replace adult labour in various sectors, from plantations and mining to domestic work. The study found, for example, that in 1940, the majority of domestic servants in urban centres like Lourenço Marques (Maputo) were boys between the ages of 10 and 15. Moreover, by 1944, almost half of the Africans under correctional labour were children under the age of 14.
Public policies and coercive measures, including forced labour and penal systems, significantly impacted children. Despite these conditions, children exhibited a degree of agency, reacting to work conditions and incentives. As early as 1924, public works like road construction employed child labour through forced means, as warned by an envoy reporting to the League of Nations. Such coercive measures often had their roots in colonial policies designed to address perceived labour scarcity, leading to the recruitment or forceful engagement of child labourers.
The article informs our understanding of colonial labour practices, emphasising the role of children as not just passive subjects but also as agents with some degree of choice and reaction to their circumstances. It also examines how Portuguese colonial policies uniquely influenced child labour patterns compared to other African colonies.
My takeaway: While a much-debated topic for scholars of the Industrial Revolution, very little attention has been given to the involvement of children in Africa's industrialisation. This paper is a great start.
8. Female genital cutting and weather patterns
A new paper by Tamara McGavock and Lindsey Novak in the Journal of Development Economics highlights a tragic but important research topic: female genital cutting.
Five-point summary:
The study aims to understand why female genital cutting (FGC) persists despite global efforts to eliminate it, focusing on the influence of economic conditions like droughts in Sub-Saharan Africa. It also seeks to fill knowledge gaps regarding why some families abandon the practice.
The study finds that adverse economic shocks, specifically droughts, can lead to a delay or complete forgoing of FGC practices for girls. On average, about 7% of girls at risk of undergoing FGC experience a change in outcomes due to droughts.
The impact of economic conditions like droughts on the decision to practice FGC varies according to ethno-cultural traditions. For example, some communities that usually practice FGC at younger ages were more likely to delay or forgo the practice in the face of an economic shock. Conversely, communities that have a wider age range for FGC were more likely to proceed with the practice, possibly because FGC is seen as beneficial for marriage prospects, including potential bride price payments.
The study also finds evidence of intra-household spillover effects. If an economic shock such as drought affects the family when an older daughter is at an age where FGC is usually considered, it also impacts whether younger daughters undergo FGC. Specifically, younger daughters are 1.5 percentage points less likely to be cut if their family experiences an economic shock when an older sister is at the usual age for FGC.
The authors provide the first causal evidence linking economic conditions to the decision-making process around FGC, revealing that the practice is economically sensitive. They offer new insights into the diversity of ethno-cultural traditions surrounding FGC and how these traditions modulate the impact of economic shocks.
My takeaway: Cultural traits, even ones as deplorable as FGC, ultimately have economic roots. Those hoping to root out such practices should take note.
9. Motorcars in America
Not everyone can write a paper with a single brand name in the title, but that is precisely what Shari Eli, Joshua Hausman and Paul Rhode have done.
Five-point summary:
The paper aims to understand the rapid adoption of the automobile in the United States, mainly focusing on the role of the Ford Model T in this process. It explores why the U.S. led the world in motor vehicle adoption and how the Model T contributed to this lead.
The paper documents that between 1909 and 1919, the U.S. automobile market transformed from a luxury good predominantly owned by the rich in urban areas to a mass market good. It uses state and county-level data to demonstrate this shift, noting particular adoption among farmers.
The U.S. lead in motor vehicle adoption was much larger than telephone and radio adoption. For example, in 1929, Germany had 30% of the U.S. level of telephones per capita but only 4% of motor vehicles. This gap remained constant or grew from 1913-29, unlike in the case of telephones.
Although the Model T was instrumental in the U.S. for making cars affordable and widespread, its impact was limited outside the U.S. due to costs. Tariffs and expensive local production made the Model T 20 130% more expensive abroad, limiting its adoption.
The paper offers four primary contributions: 1) It documents the U.S. lead in car adoption before 1930; 2) It uses new data to describe the transition of cars from a luxury good to a mass-market product; 3) It showcases the Model T's appeal to new market segments like farmers; and 4) It uses newspaper advertisements to highlight the higher costs of the Model T outside the U.S.
My takeaway: Not all technologies are relevant to all places at all times. (There are many potential explanations for this; see Acemoglu and Johnson’s new book, Power and Progress, or the earlier work of Bob Allen on why the Spinning Jenny was invented in England.) As a consequence, its impact will vary substantially across space and time. The Model T is an excellent example of that.
10. The persistent patterns of migration
A new working paper by David Escamilla-Guerrero, Edward Kosack and Zachary Ward investigates the impact of war in Mexico on migration to the United States.
Five-point summary:
The authors investigate the relationship between conflict and migration patterns during the Mexican Revolution (1910-1917). It raises an empirical question about whether the revolution was a significant driver of migration patterns or if other factors, like the labour shortages of World War I, were more influential.
To estimate the effect of conflict on migration, the researchers collected daily data on migration flows during the 1910s from individual border crossings and daily data on insurgency events from military reports. They linked these two sources at the municipality level and utilised a fully flexible event-study design. The main results revealed that conflict caused a short-run increase in migration rates of 60% relative to pre-event levels, with a large transitory response lasting a few months. Beyond five months, the rates returned to pre-event levels, and no permanent impact was found.
The study further identified violence as the primary treatment channel, where more violent events led to a transitory increase in migration. Results also presented insights into how migration costs, migrant networks, and land ownership shaped migration decisions in conflict situations. For instance, migration costs did not preclude refugee flows but moderated the time of response, and contacts abroad were essential for escaping conflict.
Unlike other studies focusing on the persecution of specific ethnic groups, this paper identifies the effect of conflict on migration for the entire population, reflecting a more generalised view of how violent conflicts can induce changes in migration rates.
The paper adds to our historical understanding of one of the most critical migration flows of the 20th century. Although the Mexican Revolution influenced migration, it did not significantly change the geography or relative importance of migrant-sending municipalities. High-sending municipalities remained so even after the conflict ended.
My takeaway: Migration has remarkable momentum. As global immigration becomes an increasingly fraught political topic, it is worth considering the implications of persistent migration patterns for both the developed and developing world. The Mexican Revolution shows how conflict and violence can lead to temporary increases in migration rates but not permanent changes in migration patterns. An afterthought: the result that migration increased significantly in municipalities closer to the border during conflict periods could easily apply to South Africa, where proximity to other nations and the effects of historical and ongoing conflicts might similarly influence migration patterns.