IFCS - Working Papers in Economic History.WH

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Economic freedom in retrospect
(2023-06-05) Prados de la Escosura, Leandro; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
This paper analyses economic freedom for a sample of 21 OECD countries over the past 170 years on the basis of a new thoroughly revised Historical Index of Economic Liberty (HIEL). Long-term gains in economic freedom reached two-thirds of its potential maximum. The expansion of economic freedom was abruptly interrupted by the world wars and resumed after 1950, to peak in 2000 and stagnate thereafter. International openness has been its main contributing dimension, especially after 1950. Stability in the country ranking coexisted with a narrowing of the distance between countries' levels of economic freedom.
Subjective Well-being in Spain's Decline
(2023-05-08) Álvarez Nogal, Carlos; Prados de la Escosura, Leandro; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
Spain experienced economic decline from the 1570s to 1650, recovering gradually thereafter and only reaching its early 1570s per capita income in the 1820s. How did economic decline impact on people's perception of well-being and inequality? We provide an answer based on an unexplored source, the Bulls of the Crusade, an alms that, after 1574, was annually collected by the Spanish Monarchy in its territories, and that, to some material benefits, added spiritual benefits: plenary indulgencies that erased the penance for guilt after sinning. An inexpensive but fixed price alms was massively bought by those aged 12 and above. The number of bulls sold relative to the relevant population provides a measure of spiritual comfort and, hence, of subjectivewell-being. A subjective inequality measure, the ratio of the 8 Reales bulls sold, intended for wealthy and high social status people, to the 2 Reales bulls sold, intended for the common people, is also estimated. Our results suggest that subjective wellbeing deteriorated during the late sixteenth and early seventeenth century improving during its last third, while subjective inequality increased from 1600-1640 to fall in the third quarter of the century. Thus, improvements in subjective well-being were accompanied by a decline in subjective inequality.
How many people on earth? World population 1800-1938
(2023-01-31) Federico, Giovanni; Tena Junguito, Antonio; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
The number of people is one of the most basic information about any society but it is difficult to know it. The data are missing for most of human history and scarce and/or hardly reliable for advanced countries until the early 19th century and for the rest of the world until the mid-20th century. Yet, historical demographers have tried hard and often successfully to estimate population in the past, but their results have often been neglected in the most common general historical data-bases. Thus, we do not have a continuous series of world population at least until World War One if not until 1950. In this paper we fill this gap by re-estimating series of population for all polities from 1800 to 1938 using first-hand sources and country-specific literature. We use our series to address two issues which have attracted some attention by economist and economic historians in the last years, the start of the demographic transition and the impact of major demographic crises such as the Tai'ping civil war, World War One and the Spanish flu.
Losing height: measuring the regional loss of human capital from the Republican exile to Mexico
(2023-01-20) Sanchez Alonso, Blanca; Santiago Caballero, Carlos; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
Recent studies showed that Spanish republican exiles who travelled to Mexico to escape the effects and aftermath of the Spanish civil war were positively selected. However, the potential existence of regional differences in this positive selection needs to be addressed appropriately. Using a new dataset directly extracted from primary sources, we compare the heights of the republican exiles in Mexico with the estimations of those who stayed behind in their provinces of origin. We also study the existence of potential determinants to explain these differences. In addition to estimating how intense the loss of human capital was at the regional level, we also compare the heights of the republican exiles in Mexico with the heights of the Mexican population. Our results show significant regional differences in the positive selection of republican exiles. This was probably the consequence of the opportunities the local populations had to escape after the war started. We also show that Mexico was a place where Spanish migrants were able to obtain better occupations than their counterparts in Spain, meaning that although Mexico benefited from the arrival of a highly skilled labour force, it also provided republican exiles new opportunities.
A labour of freedom: 'free wombs' and slave emancipation in postcolonial Uruguay
(2022-12-22) Travieso Barrios, Emiliano; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
The workings of the transitions from slavery to freedom shaped development paths in the Americas. I rely on a new dataset based on manuscript population listings to offer the first quantitative analysis of selective slave emancipation in postcolonial Uruguay, where by 1836 a third of people of African descent were free. Freedom came primarily through their own labour—both in the sense of working and giving birth—in an institutional context which was at best indifferent to their destiny, as fewer than 3% of them directly benefited from the 'free wombs' reform. Ref lecting racial status hierarchies, people born in Africa and those of darker complexion were more likely to remain enslaved. Using a probit model to control for the effects of age, origin, gender, and other covariates, I show that Black people were more likely to be free in smallholder rural areas, especially less fertile ones. The results suggest that the lack of any policy towards freedpeople resulted in an embedding of racial inequality onto de facto resource allocation before the de jure abolition of slavery in 1852.
Land Reform and Farming in Interwar Europe
(2022-12-22) Simpson, James; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
Why are some land reforms more successful than others? Interwar Europe provides an opportunity to answer this question as many countries, often at different levels of economic development, carried out major reforms. In agrarian societies in Eastern Europe, the pro-poor redistributive land reforms transferred a fifth of agricultural land and were expected to transform not just farming, but political life. Although farmers struggled because of insufficient land and weak markets, land reform allowed families to maintain food consumption in the 1930s by increasing selfsufficiency. By contrast, policy makers in transforming economies such as Czechoslovakia or Spain were divided between meeting the economic and political needs of those farmers living in acute poverty and responding to the struggling familyoperated commercial farmers. Land reform strengthened agrarian political parties, but these were generally too divided along nationalist cleavages to influence policy in the new successor states, and by regional differences created by uneven economic development in transforming economies.
Opening the black box of distance: evidence from Italy, 1862-1938
(2022-12-22) Absell, Christopher David; Incerpi, Andrea; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
Historical studies of international trade have firmly established that distance was an important determinant of bilateral trade during the last two centuries. Despite the distance effect being one of the most robust results in trade history, we do not know much about how this effect changes over time, trade flows, across trading partners or traded goods. This paper examines the effect of distance on Italian bilateral trade comparing two periods: the first globalisation and the interwar years. Using a structural gravity model and data on Italian exports and imports by country and product and a new series of freights for the period 1862 to 1938, we find that the size and significance of the distance effect was highly contingent on the period and product composition of trade. While the trend in the effect of distance on trade during the first globalisation reflected the conventional story of the decline of transport costs during this period, the 1920s displays opposite trends for exports and imports. Further analysis of imports on the product-level reveals a similar heterogeneity of effect by product class. The distance elasticities of manufactured and industrial products reflected the overall trend, while those of raw materials and fuels did not seem to follow any clear pattern. We generate time series of trade to distance elasticities on the four-digit product category level and regress these on measures of trade costs and substitutability. We find that the distance effect at the product-level is explained by shifts in Italy's transport costs and the (gamma) elasticity of substitution across products.
Pandemics and protectionism: evidence from the "Spanish" flu
(2020-07-03) Boberg-Fazlic, Nina; Lampe, Markus; Pedersen, Maja Uhre; Sharp, Paul; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales; Universidad Carlos III de Madrid
The impact of COVID-19 on recent tendencies towards international isolationism has been much speculated on but remains to be seen. We suggest that valuable evidence can be gleaned from the "Spanish" flu of 1918-20. It is well-known that the world fell into a protectionist spiral following the First World War, but scholars have almost exclusively ignored the impact of the pandemic. We employ a difference-in-differences strategy on data for Europe and find that excess deaths had a significant impact on trade policy, independent of the war. A one standard deviation increase in excess deaths during the outbreak implied 0.022 percentage points higher tariffs subsequently, corresponding to an increase of one third of a standard deviation in tariffs. Health policy should aim to avoid the experience of the interwar period and consider the international macroeconomic impact of measures (not) taken.
Religious change and persistence in Bosnia: Poverty, conversions, and nationalism, 1468-2013
(2022-06-24) Kukic, Leonard; Arslantas, Yasin; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
While economic historians have invested a great deal of effort into understanding the economic consequences of religion, they have invested comparatively little effort into understanding the determinants of religious affiliation. This paper analyses conversions to Islam in the OttomanBosnia. Employing village-level data constructed from the Ottoman tax registers of 1468 and 1604, we find that households in the initially poorer villages were more likely to convert to Islam. This finding is consistent with the notion that the poll tax that non-Muslims had to pay stimulated the poorer Christians to convert to Islam. Using a stream of modern population censuses since the 19th century, we also find that our results hold after the end of the Ottoman rule and its discriminatory tax in 1878. We hypothesize that religious identity persisted because it became embedded into the rising national consciousness during the nineteenth century, reinforcing the cost of changing religion.
Greasing the Wheels of Rural Transformation? Margarine and the Competition for the British Butter Market
(2014-03-01) Lampe, Markus; Sharp, Paul; John Wiley & Sons, Inc.
This article considers an example of the impact of a new good on producers of close substitutes: the invention of margarine and its rapid introduction into the British market from the mid-1870s. This presented a challenge to the traditional suppliers of that market, butter producers from different European countries. We argue that the capacity to react quickly to the appearance of this cheap substitute by improving quality and establishing product differentiation was critical for the fortunes of butter producers. This is illustrated by a discussion of the different reactions to margarine and quality upgrading in Ireland, Denmark, and the Netherlands. A statistical analysis using monthly data for Britain from 1881&-7 confirms that margarine had a greater impact on the price of poor quality butter than that of high quality butter, presumably because it was a stronger substitute.
Health, income, and the Preston Curve: a long view
(2022-03-29) Prados de la Escosura, Leandro; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
Well-being is increasingly viewed as a multidimensional phenomenon, of which income is only one facet. In this paper I focus on another one, health, and look at its synthetic measure, life expectancy at birth, and its relationship with per capita income. International trends of life expectancy and per capita GDP differed during the past 150 years. Life expectancy gains depended on economic growth but also on the advancement in medical knowledge. The pace and breadth of the health transitions drove life expectancy aggregate tendencies and distribution. The new results confirm the relationship between life expectancy and per capita income and its outward shift over time as put forward by Samuel Preston. However, the association between nonlinearlytransformed life expectancy and the log of per capita income does not flattenout over time, but becomes convex suggesting more than proportional increases in life expectancy at higher per capita income levels.
Power politics and the expansion of U.S. exports, 1879-1938
(2022-02-23) Tena Junguito, Antonio; Restrepo Estrada, María Isabel; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
In this paper we present for the first-time quantitative evidence of the effect of U.S. power policy on the expansion of its export market from the late-19th century to the eve of World War II. U.S. imperial policies were expressed through annexation, dominion, and gunboat policies, as did other empires, and exports to these markets grew more than three times faster than the rest of the territories. Our most relevant contribution to the discussion that power plays a critical role in international trade is based on a new geographically extensive database with information on bilateral trade flows, market size, trade costs and variables that capture U.S. political and military power. We first estimate a gravity equation to see the relationship between our political variables and U.S exports and then we present causal evidence of the role of the colonies and protectorates in the expansion of U.S exports through an event study and the estimation of a generalized difference-in-differences model.
The Industrial Revolution, an unintended consequence of self-defence?
(2021-10-05) Prados de la Escosura, Leandro; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
This short paper examines Patrick O'Brien's bold reinterpretation of the British Industrial Revolution as a joint result of the expropriation of land by the landed aristocracy, abundant coal endowments, and the unintended consequences of self-defence, in the context of historical literature and contraposes it to evidence on long run growth and inequality and alternative narratives of British industrialisation. It concludes that, by neglecting the contribution of culture and institutions to incentivise investment and innovation, O'Brien lessens the role of the British Industrial Revolution for understanding modern economic growth.
Revealing the diversity and complexity behind long-term income inequality in Latin America: a new dataset, 1920-2011
(2021-10-05) Astorga Junquera, Pablo; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales; Ministerio de Ciencia, Innovación y Universidades (España)
The period between 1920 and 1980 is of great importance for the study of inequality in Latin America because of the occurrence of state-led, protected industrialisation amid structural, demographic and institutional transformations. Although there are valuable contributions at the country level, the study of income inequality from a broad regional perspective has been hindered by limitations of comparable metrics. To address this gap a new dataset has been assembled including Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela. The approach adopted distinguishes four occupational groups: the top group includes employers, managers and professionals; the remaining three groups are defined according to the workers' skill level, largely receiving wage income. This allows for the calculation of inequality between and within groups, as well as overall Ginis for all income and wage income. The frequency of the series is annual, making it possible to track closely inequality trajectories. Despite being a high-inequality region, this new evidence reveals great diversity of outcomes across the six countries and complexity within the occupational structure. There is no single inequality metric that captures the whole story. Looking forward, this dataset opens the door to undertake econometric analysis to unpick the inequality contribution of key drivers such as the terms of trade and structural change.
Patterns of Iberian economic growth in the early modern period
(2019-11-18) Palma, Nuno; Santiago Caballero, Carlos; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
Around 1500 Spain and Portugal were among the most affluent nations in the world, and had income levels which were similar to those of other Western European countries. Three hundred years later the Iberian economies had lost their economic supremacy and fell behind all the main European powers. When did the first two global empires in history lose their hegemony to become secondary actors? What were the foundations of the collapse that explains the divergence from northwestern Europe? In this chapter we address these issues and describe what we now know about the long-term trends of Iberian economies between 1500 and 1800.
Technical change and the postwar slowdown in Soviet economic growth
(2021-09-10) Kukic, Leonard; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
The existing studies usually find that technical change was very important in constraining the economic growth of the Soviet Union. While these studies have been successful in quantifying the extent of technical change, they have been less successful in quantifying its nature. This paper probes the essence of technical change by analysing its direction and bias. I find that the Soviet Union achieved strong increases in labour efficiency until the 1960s. Although the labour efficiency growth subsequently slowed down, it is capital efficiency that drove the postwar slowdown in economic growth. I argue that labour shortages, combined with an inadequate investment policy, retarded the Soviet capital efficiency.
Landlords and sharecroppers in wine producing regions: Beaujolais, Catalonia and Tuscany, 1800-1940
(2021-05-10) Carmona, Juan; Simpson, James; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales; Ministerio de Ciencia e Innovación (España)
The growing success of small family farms in Europe before 1930 was found alongside large estates. Tenanted estates enjoyed the advantages of the greater incentives of family farmers to maximize their production, and the economies of scale for marketing, credit or technical improvement of large exploitations. A particular case is the tenanted estates specialized in the production and marketing of wine and using sharecropping contracts. Technical changes, the increasing of scale economies in wine production, and the impact of Phylloxera after 1870 had an impact in the nature of the contract as landlords increasing the control on production. This paper compares the three specific cases of Beaujolais, Catalonia and Tuscany, where tenanted wine producing estates were common throughout this period, and the responses of owners and settlers to these changes in the long term.
Land reform and rural conflict: evidence from 1930s Spain
(2021-04-15) Basco Mascaro, Sergi; Domènech Feliu, Jordi; Maravall Buckwalter, Laura; Universidad Carlos III de Madrid. Departamento de Historia Económica e Instituciones; Ministerio de Ciencia e Innovación (España)
We use a novel high-frequency, municipality-level dataset to examine the impact of land reform on rural conflict in 1930s Spain, a classical example of property rights reform in a developing economy. We distinguish between types of implementation and consider five types of conflicts: land invasions, peasant strikes, clashes, petty theft and attacks on land owner assets. By performing a differences-indifferences regression analysis, we document three main results. First, overall, land reform only increased the number of reported petty thefts, lasting around two years, followed by a reversion to pre-reform levels. Second, the effects of land reform depend on its implementation. A technical implementation was conducive, if anything, to fewer conflicts (clashes and attacks). In contrast, a more political implementation (which gave, on average, less land per peasant) increased reported petty theft sand, to a lower extent, attacks on owners'assets. Third, we provide suggestive evidence that the fall in income of settlers (the, a priori, benefficiaries) explains the increase in social conflict. Our results highlight the importance of the design and implementation of social policies, especially in the context of an agrarian economy.
Socio-economic determinants of survival in a nazi concentration camp: the experience of Spanish prisoners at Mauthausen
(2021-04-07) Domènech Feliu, Jordi; Fernández González, Juan Jesús; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
This paper advances the literature on the determinants of survival in contexts of indiscriminate violence through a case-study of Spaniards in the Mauthausen concentration camp. We benefit from the high-quality individual information collected by Spaniards with administrative jobs at the camp. Although our analysis also examines the role of age, marital status, and religious self-identification, our main focus lies in the role of social class in survival, with social class determined by the occupation prior to the deportation. We hypothesize individuals from higher social classes display higher survival probabilities through their greater capacity to fill relevant positions in the camp, their more central location in support networks and probably better command of the German language. Using Cox models, the results support our main hypothesis. The risk of death was highest amongst unskilled agricultural workers, followed by unskilled non-agricultural workers.
Inequality beyond GDP: a long view
(2021-02-26) Prados de la Escosura, Leandro; Universidad Carlos III de Madrid. Instituto Figuerola de Historia y Ciencias Sociales
The study of international well-being and its distribution remains focused on income. This paper addresses multidimensional well-being from a capabilities perspective during the last one-and-a-half centuries. Relative inequality (population-weighted) fell in health and education since the late 1920s, due to the globalisation of mass schooling and the health transition, but only dropped from 1970 onwards in terms of political and civil liberties, and declined since 1900 for augmented human development. These results are at odds with per capita income inequality that rose over time and only shrank from 1990 onwards. Relative and absolute well-being distribution behaved differently, with the distance between countries shrinking in relative terms but widening in absolute terms. Countries in the middle and lower deciles of the world distribution achieved the largest relative gain over the last century. Education and political and civil liberties were the main contributors to the evolution of augmented human development inequality, although longevity made a substantial contribution until the 1920s.

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