Up until the mid-nineteenth century Russia had an enserfed peasantry, a mere 1,000 or so miles of railways, and a small, almost insignificant market sector. When serfdom was abolished (1861) and the expansion of railroads started to occupy a prominent place in development policy toward the end of the nineteenth century, Russia was launched on a transformation from a state of preindustrial and pre-capitalistic backwardness into a path of modernization and industrialization.

The members of the Association must be sick to death of “The Achievements of the Cliometric School.” The health of a field, it is said, is inversely proportional to the percentage of essays on method, by which standard cliometrics itself was sick to death in childhood and is only just now recovering. The few essays on method appearing nowadays are usually commissioned, lack revolutionary fervor, and have become as predictable as sportswriting: gee whiz, how extraordinary has been the growth of cliometrics; cliometrics, of course, is gravely limited by its attachment to neoclassical economics; do not be alarmed by counterfactuals. Essays on method, like articles on the sportspage, irritate the players (nobody loves a critic), flatter the owners (in whose pay he sometimes labors), and hearten the loyal fen (with the written equivalent of the chant “We're number one”). They foreshadow the post-season banquets and their awards: Most Valuable Scholar, Best Book Reviewer (Golden Glove), or, in another mode, Best Historian in a Supporting Role, and Farce of the Year.

Nineteenth-century laws granted wives previously withheld rights to their own property and earnings as well as liability for debts and contracts. I use 4,198 women's patents to assess whether these laws encouraged greater female commercial activity. Patentees were motivated by potential profits and were responsive to market incentives. Women's patenting jumped significantly in states with legal reforms and was lowest in states without such laws. Much of the subsequent increase occurred in metropolitan centers where property rights were of greater concern. Thus, by reducing transactions costs and increasing expected benefits, legal reforms arguably stimulated women's investments in patenting and commercial activities.

We investigate the effect of the establishment of modern institutions on the risk premium associated with Japanese government bonds traded in London between 1870 and 1914. While most institutional innovations failed to elicit an immediate market response, the adoption of the gold standard did significantly reduce the perceived risk associated with Japanese bonds. In addition, some geopolitical events, especially the military victory over Russia, improved Japan's debt capacity.

The problem of the origins of marine insurance is one of the most complicated and controversial questions in the history of business institutions. One cause of this confusion is the fact that the earliest documentary sources are often ambiguous and lend themselves to widely varying interpretations. The legal writers, who have done most of the research on the early history of insurance, have focused their attention upon certain documents of the late thirteenth and the early fourteenth centuries. As these sources unfortunately give incomplete information, the results of all this research have been rather disappointing. The minute scrutiny with which the legal writers have examined the early documents has produced subtle and brilliant examples of textual criticism but has also given rise to conflicting theories which have confused the issues instead of clarifying them.

With their legal personhood, permanent capital, transferable shares, separation of ownership and management, and limited liability, the Dutch and English colonial trading companies VOC and EIC are considered institutional breakthroughs. We analyze the VOC's business operations and financial policy and show that its novel corporate form owed less to foresight than to piecemeal engineering to remedy design flaws. The crucial feature of managerial limited liability was not, as previously thought, integral to that design, but emerged only after protracted experiments with various solutions to the company's financial bottlenecks. Legal form followed economic function, not the other way around.

Does a legal tradition adopted in the distant past constrain a country's ability to provide the protection that investors need for financial markets to develop? I look at the relationship between legal origin and the development of bond markets and find too much variation over time in bond market size, creditor protections, and court enforcement of bond contracts to assume that the adoption of a legal system constrains future financial development. I examine the evolution of bond markets in Brazil, a French civil law country, and provide preliminary results of similar variation for a small cross-section of countries.

The rise of the new economic history has provoked a vigorousdebate on methodology. At issue is the validity of the effort of econometric historians or cliometricians, as practitioners of the new work are sometimes called, to apply the mathematical models of economics to the study of history. Some older historians have attacked the use of such models on the ground that they violate the empirical character of the discipline. In this view, the models employed by the cliometricians represent an unwarranted intrusion of speculation into an area of research previously limited to the careful collection and presentation of facts. The most severe criticism has been directed at the propensity of the new economic historians to deal with questions of the counterfactual-conditional type, that is, with questions which ask how the development of the economy would have been altered by the absence of one or more of its observed features. It has been asserted that the models which underlie the answers to such questions are “figments” and that they cannot be verified. Consequently counterfactual models are held to be a direct threat to the integrity of economic history as an empirically confirmed description of the economic development of nations.

In 1904 the Roosevelt Corollary to the Monroe Doctrine proclaimed that the United States would intervene in the affairs of unstable Central American and Caribbean countries that did not pay their debts. We find that the average sovereign debt price for countries under the U.S. “sphere of influence” rose by 74 percent in response to the pronouncement and actions to make it credible. We use this policy change to show that the United States subsequently acted as a regional hegemon and provided the global public goods of increased financial stability and peace. Reduced conflict spurred export growth and better fiscal management, but debt settlements were driven primarily by gunboat diplomacy.

This address considers the role of culture in economic history. It argues that AngloSaxon culture was an important factor determining where and when industrialization began and spread. The contrast between Anglo-Saxon individualism and Japan’s more collective culture also is important in understanding the differences between Japanese and American industrial practices today. I predict that Japan’s collective culture may give it an economic edge in the coming years despite its current difficulties. And I advocate greater attention to culture by both economists and historians in the practice of economic history.

We study the correlates of the monthly establishment wage—the average monthly wage at the establishment level—and changes in wage dispersion between plants using a model of manufacturing developed by Goldin and Katz and data from manuscript censuses of manufacturing. We find that wages were decreasing in establishment size, but increasing in capital intensity and use of steam power. We also find an increase in inequality in the establishment wage between 1850 and 1880. Most of the increase occurred below the median wage and can be attributed, in part, to the growing concentration of employment in large establishments.

The banking panic of 1930 has special significance for assessing the causal role of money during the Great Depression. A detailed examination of the panic-induced bank closings in November reveals that poor loans and investments in the 1920s was the principal factor contributing to the accelerated rate of bank suspensions. These findings are consistent with the. Friedman-Schwartz interpretation of the 1930 banking panic as a purely autonomous disturbance largely unrelated to the decline in economic activity. It is inconsistent with Peter Temin's conjecture that declining prices of lower-grade corporate bonds and the agricultural situation played an important causal role.

This paper exploits the history of Reconstruction after the American Civil War to estimate the effect of politician race on public finance. While the effect of black politicians is positive and significant, black officials may be endogenous to electoral preferences for redistribution. I therefore use the number of free blacks in the antebellum era (1860) as an instrument for black political leaders during Reconstruction. Instrumental variables (IV) estimates show that an additional black official increased per capita county tax revenue by $0.20, more than an hour’s wage at the time. The effect was not persistent, however, disappearing entirely once black politicians were removed from office at Reconstruction’s end. Consistent with the stated policy objectives of black officials, I find positive effects of black politicians on land tenancy and black literacy. These results suggest that black political leaders had large effects on public finance and individual outcomes over and above electoral preferences.

We investigate how technology has influenced the size of armies. During the nineteenth century, the development of the railroad made it possible to field and support mass armies, significantly increasing the observed size of military forces. During the late twentieth century, further advances in technology made it possible to deliver explosive force from a distance and with precision, making mass armies less desirable. We find support for our technological account using a new data set covering thirteen great powers between 1600 and 2000. We find little evidence that the French Revolution was a watershed in terms of levels of mobilization.

This paper analyzes the transition from agents to branch selling as alternative institutional modes for transacting abroad by pre-1939 British manufacturing multinationals. A model to explain the shift between alternative modes is specified in terms of transaction costs. Agent opportunism and contract monitoring costs are the major transaction costs. Besides transaction costs, the frequency of transactions and the accumulation of market-specific knowledge by the principal were found to be important variables.

I use Body Mass Index (BMI) to investigate how the ralationship between health status and retirement among older men has changed since 1900. Although BMIs for the elderly were much less healthy in 1900 than today, the BMI level that maximizes labor force participation rates has not changed. However, in 1900 the elasticity of nonparticipation with respect to BMI was greater than it is today, suggesting that health is now less important to the retirement decision than in the past. Other factors (especially rising income) are more important than health in explaining the historical changes in retirement rates.

How do property rights evolve when unoccupied areas attract economic use? Who are the first claimants on the frontier and how do they establish their property rights? When do governments provide de jure property rights? We present a conceptual framework that addresses these questions and apply it to the frontiers of Australia, the United States, and Brazil. Our framework stresses the crucial role of politics as frontiers develop by identifying situations where the competition for land by those with de facto rights and those with de jure rights leads to violence or potential conflicts.

The completion of the undersea Atlantic telegraph cable more closely integrated securities markets on two continents. This article conducts an event study on the introduction of the Atlantic Cable in July 1866. Using daily data on one security with a dual listing on the New York and London stock exchanges, the event study provides some evidence that the information lag between the two markets shortened from ten days to zero days. Cointegration analysis confirms the result. Historical markets priced securities so well that transatlantic steamship crossing times can be recovered from stock prices.

Railroads in late nineteenth-century Japan are credited with facilitating factor mobility as well as access to human and financial capital, but their impact on firms has been unclear. Using a prefecture-level panel data set and a difference-in-differences model that exploits the temporal and spatial variation of railroad expansion, I investigate the relationship between railways and increased firm activity. Rail access led to higher average firm capitalization, particularly in manufacturing, and more populated and less accessible areas gained disproportionately more firms. By widening markets and allowing for agglomeration economies, Japanese railways promoted capital investment and more efficient resource allocation.