Cotton, industrialisation and a missing piece of the puzzle

by Alka Raman (London School of Economics)

This study was awarded the prize for the best new researcher poster at the EHS Annual Conference 2019 in Belfast. The poster can be viewed here.


Cotton merchant, taken by Francis Frith between 1850 and 1870. Available at Wikimedia Commons.

The first Industrial Revolution has long been seen as the beacon of modernity, heralding unprecedented economic growth and the biggest uplift of living standards in human history. Its prominence amid themes in economic history is such that it dwarfs all others in comparison, including the fact that the British cotton industry – the nucleus of industrialisation – was not the world’s first cotton manufacturing industry serving a global demand for cotton goods.

Handmade cotton fabrics were exported from India to the rest of the world as early as the twelfth century. Indeed every textbook on economic history, when charting the growth of the British cotton industry, precedes its achievements with a dutiful narration of the introduction of cotton goods into England by the English East India Company in 1699 and the ‘frenzy’ for these cottons within the domestic and overseas markets.

But a passing reference to imitations quickly gives way to an impressive series of mechanisations and illustrious British inventors associated with them. Any connection to the preceding handmade Indian product is effectively lost.

Consequently, a crucial piece of the puzzle – how the seat of cotton manufacturing went from the Indian subcontinent to the heart of England – has remained inadequately explained. Learning from pre-existing products has been mentioned, but what this learning contained, how it may have been transferred and with what kind of outcomes are concepts that have been under-explored.

Hence the question at the heart of my research: did the pre-existing, handmade and globally demanded Indian cottons influence the growth and technological trajectory of the nascent British cotton industry?

Central to my thesis is the idea that the pre-industrial Indian cotton textiles contained the material knowledge required for their successful imitation and reproduction. These handmade Indian cottons embodied the cloth quality, print, design and product finish that the machine-made goods sought to imitate. Did learning from these pre-existing market-approved products contribute to the growth of early British cotton manufacturing?

My research identifies learning from the benchmark product, as well as competition with it, as two simultaneous stimuli shaping the British cotton industry during its initial phase. In terms of methodology, the thesis tests these two stimuli against historical textual and material evidence.

The writings of manufacturers, traders and historians/commentators of the period show that both manufacturers and innovators recognised that there was a knowledge problem or a ‘skills gap’: British spinners could not spin cotton warp to match Indian hand-spun warp’s quality. Entrepreneurs identified matching the quality of Indian hand-spun warp as a key motivation for innovation. Their language of quality comparisons with reference to Indian cottons is crucial and highlights comparative quality-related learning from Indian cotton goods.

Does the material evidence corroborate this textual finding? To establish if cloth quality improved over time, I study the material evidence (surviving cotton textiles from the period) under a digital microscope and thread counter to chart the quality of these fabrics over the key decades of mechanisation. I use thread count to establish the comparative quality of the machine-made cotton fabrics vis-à-vis the handmade Indian cottons.

My findings show that early British ‘cottons’ were, in reality, mixed fabrics using linen warp and cotton weft. In addition, the results show a marked increase in cloth quality between 1746 and 1820.

Assessed together, the textual and material evidence demonstrate that mechanisation in the early British cotton industry was geared towards overcoming specific sequential quality-related bottlenecks, associated first with the ability to make the all-cotton cloth, followed by the ability to make the fine all-cotton cloth.

Imitation of benchmark Indian cottons steered the growth of the British cotton industry on a specific path of technological evolution – a trajectory that was shaped by the quest to match the quality of the handmade Indian cotton textiles.

The aftermath of sovereign debt crises

by Rui Esteves (Graduate Institute of International and Development Studies), Seán Kenny (Lund University) and Jason Lennard (National Institute of Economic and Social Research)

This paper was presented at the EHS Annual Conference 2019 in Belfast.



Financial Crisis. Available on Pixabay.


The memory of recent crises, such as the Argentinean default of 2001 or the Greek near-misses between 2010 and 2015, suggests that defaults are costly and are better avoided at all costs.

This was surely one of the key arguments that led the Syriza-led Greek government to back down from the uncompromising demands of debt relief. The fear of provoking the mother of all recessions by defaulting and exiting the euro focused the minds of politicians and paved the way for the third Greek bailout in 2015.

Likewise, everyone remembers the scenes of economic and political chaos after the Argentinean default of December 2001.

But countries do not usually stop paying their debts on a whim – defaults can be forced on them by large recessions, which sap their ability to collect taxes and repay their debts. Economists call these events ‘endogenous’ because the recessions are both a cause and consequence of defaults. It is therefore unclear whether defaults have any real penalty over and above the recessions that cause them in the first place.

This has led to disagreement in the research literature between authors finding large and persistent negative effects (Arteta and Hale, 2008; Furceri and Zdzienicka, 2012; Esteves and Jalles, 2016) and others who do not find any costs (Levy Yeyati and Panizza, 2011).

In our new study, we solve this empirical challenge by using a narrative approach to identify the causes of defaults since the mid-nineteenth century. Rather than relying on complicated statistical methods, we read contemporary reports from creditor organisations and financial newspapers.

Based on these sources, we classify each default as either endogenous (caused by economic shocks) or exogenous (caused by other factors, such as contagion or wars). The narrative approach has been used extensively in other contexts, such as identifying the effects of fiscal policy (Romer and Romer, 2010; Ramey, 2011), monetary policy (Romer and Romer, 2004; Lennard 2018) and banking crises (Jalil, 2015).

Our analysis suggests that some defaults are indeed caused by weak economies. For example, The Economist reported that ‘no commercial community has ever passed through a worse crisis than that of Uruguay’ prior to its default in 1876.

Others, however, are seemingly caused by more exogenous factors. On the Brazilian default in 1937, the Financial Times noted that there was ‘no sufficient economic justification for a suspension of existing payments’, citing the new dictator’s unwillingness to pay as the ultimate cause.

We then use the evidence from plausibly exogenous defaults and state-of-the-art empirical methods to settle cleanly the question of how defaults affect the economy. Our preliminary results show that there is a statistically and economically significant reduction in output in the aftermath of sovereign debt crises.




Arteta, C. and Hale, G., ‘Sovereign debt crises and credit to the private sector’, Journal of International Economics, 74 (2008), pp. 53-69.

Esteves, R. and Jalles, J., ‘Like father like sons? The cost of sovereign defaults in reduced credit to the private sector’, Journal of Money, Credit and Banking, 48 (2016), pp. 1515-45.

Furceri, D. and Zdzienicka, A., ‘How costly are debt crises?’, Journal of International Money and Finance, 31 (2012), pp. 726-42.

Jalil, A., ‘A new history of banking panics in the United States, 1825–1929: Construction and implications’, American Economic Journal: Macroeconomics, 7 (2015), pp. 295-330.

Lennard, J., ‘Did monetary policy matter? Narrative evidence from the classical gold standard’, Explorations in Economic History, 68 (2018), pp. 16-36.

Levy Yeyati, E. and Panizza, U., ‘The elusive costs of sovereign defaults’, Journal of Development Economics, 94 (2011), pp. 95-105.

Ramey, V. A., Identifying government spending shocks: It’s all in the timing’, Quarterly Journal of Economics, 126 (2011), pp. 1-50.

Romer, C. D. and Romer, D. H., ‘A new measure of monetary shocks: Derivation and implications’, American Economic Review, 94 (2004), pp. 1055-84.

Romer, C. D. and Romer, D. H., ‘The macroeconomic effects of tax changes: Estimates based on a new measure of fiscal shocks’, American Economic Review, 100 (2010), pp. 763-801.

The trafficking of children: exploitation, sexual slavery and the League of Nations

by Elizabeth A. Faulkner (University of Hull) and Cathal Rogers (Staffordshire University)

This paper was presented at the EHS Annual Conference 2019 in Belfast.


Child trafficking graffiti on brick. Available at Pexels.

The trafficking of children receives extensive media coverage today, with endless tales of exploited and enslaved children. But these reports are not isolated.

For example in 1923, the League of Nations Advisory Committee on the Traffic in Women and Children heard that ‘The White slave traffic assumed large proportions; young girls – and even young boys – swelled the personnel of the over-numerous houses of ill-fame’.[1] The purpose of our study is to identify whether fears of the sexual enslavement of children during the era were legitimate or the product of a ‘moral panic’.

The issue of human trafficking is a relatively new area of international law, but the issue has appeared on numerous occasions as an issue of grave moral concern at the international level for over a century. In 1921, the League of Nations passed the International Convention for the Suppression of the Traffic in Women and Children.

This Convention marked a notable departure from the overtly racialised focus of previous attempts to address this issue of human trafficking namely, the 1904 and 1910 White Slave Traffic Conventions.[2]

Our study investigates the trafficking and exploitation of children between 1922 and 1929 through an examination of the archives of the League of Nations, Geneva. The inquiry sought to uncover recorded cases of child trafficking through focusing on the Summary of Annual Reports submitted to the Traffic in Women and Children Committee.

In terms of references to ‘trafficking’, from the 324 responses (1922-1929) considered by this inquiry, only 11 references to trafficking were identified. As a percentage, that is just 3.3% of responses.

Our research seeks to understand the exploitation of children during the 1920s, beyond ‘trafficking for immoral purposes’. Identifying the types of exploitation that children experienced globally, whether for commercial or economic gain, sexual gratification or adoption.

The aim of the research is to challenge and enrich our understanding of morals, race and the exploitation of children in the nineteenth and early twentieth century, through deconstructing fears of the sexual enslavement of children.

The inquiry seeks to readdress the racial bias of previous examinations of the human trafficking of the era and to expand our knowledge of trafficked and or exploited children in the legacy of the ‘White Slavery Conventions’.



[1] De Reding De Bibberegg, Delegate of the International Red Cross Committee and the International Red Cross Committee and the International ‘Save the Children’ Fund in Greece. League of Nations, Advisory Committee on the Traffic in Women and Children, Minutes if the Second Session, Geneva March 22nd – 27th 1923 at 65

[2] The ‘White Slavery Conventions’ namely the International Agreement for the Suppression of White Slave Traffic 1904, the International Convention for the Suppression of the White Slave Traffic 1910, the International Convention for the Suppression of Traffic in Women and Children 1921 and the International Convention for the Suppression of the Traffic in Women of Full Age 1933

‘A collection of unruly gentlemen?’: explaining the English Parliament’s functioning, 1660-1702

by Kara Dimitruk (Stellenbosch University)

This paper was presented at the EHS Annual Conference 2019 in Belfast.


Houses of Parliament, St. Stephen’s Hall (Interior), London, England. Available at Wikimedia Commons.

How organised are legislatures in their work and policy-making? Does the organisation change and does it matter for economic activity? These questions may make you think of finding out more about the US congress or Westminster Parliament today. My work asks similar questions but looks to the past for answers.

The research, presented at the Economic History Society’s 2019 annual conference, studies members of the English parliament and their committee work before and after the Glorious Revolution of 1688, which altered fundamental rules influencing parliament’s organisation. This is important because, prior to the Industrial Revolution, countries in Europe with functioning parliaments saw greater economic growth than those without.

Using an interdisciplinary approach and set of tools, my study helps to reconcile different views on parliament’s functioning. It reveals that Members of Parliament were not ‘a collection of unruly gentlemen’ during the period, but MPs with local interests, experience and expertise, and interests in high politics came together on private bill committees. The evidence supports the idea that the Glorious Revolution made, as previous historians have characterised, ‘parliament useful to the nation’.

From 1660 to 1702, constituents introduced projects to Parliament to reorganise their property rights. Each project had to be approved by a committee and then by the entire House of Commons and Lords. Parliament saw about 900 such projects during this period.

The projects, formally called private bills or estate bills, presented a problem for parliament because each one cost the legislature time. The committee stage was crucial to ensure that projects were approved. It gathered information about the quality of the project to present to the rest of the House. The specialisation could allow parliament’s time to be used to discuss a variety of other issues.

My study collects data on MPs and their committee work for these projects. The data collection was made possible because of improvements in the accessibility in historical data made available by the British History Online, the Institute for Historical Research and the History of Parliament Trust.

Figure 1 shows the MP-committee network in two sample legislative sessions. Squares are bills; circles are MPs. The size of the squares represents the size of committees; the size of the circles represents how important MPs are to the network based on their committee connections.


I find that MPs with constituent interests were significantly more likely to work on committees, but were not central in the network for the entire period. A ‘quiet source of stability’ for parliament’s functioning, these MPs were the more likely to be the small circles or spokes in the network.

The Glorious Revolution changed institutional rules relating to government finance and parliamentary meetings, which in turn altered the value of experience and interests in high politics for committees. Committee experience became more valuable to parliament. MPs with previous committee experience were 11% more likely to work on projects and were more central.

MPs with interests in high politics, such as chairs of government finance bills, with connections the monarch, and affiliated with political coalitions or parties, were more likely to work or hold central positions in the committee network from 1660 to 1689. MPs with these interests were no more or less likely to work on committees or be central in the network after the Revolution.

The evidence suggests that the Glorious Revolution may have made parliamentary organisation relatively more efficient than in the previous era. Studying organisational changes to parliaments in the past not only provides insights into the links between functioning parliaments and historical growth, but can also provide important lessons for our understanding of the operation and organisation of modern legislatures.

Initial determinants of Mexican mass migration

by David Escamilla-Guerrero (London School of Economics)

This paper was presented at the EHS Annual Conference 2019 in Belfast.


John Tallis and John Rapkin’s 1851 Map of Mexico, Texas, and Upper California. Available at Wikimedia Commons.

We are living in a time of globalisation backlash characterised by a reduction of economic and political cooperation across borders. The renaissance of economic protectionism has manifested in increasing barriers against immigration in both the United States and Europe. Furthermore, the public perception of why people migrate seems to be increasingly influenced by nationalist prejudices rather than empirical evidence.

Using novel historical micro data, my research addresses the initial determinants of the Mexico-US migration, the most intense and persistent of the twentieth century. The main lessons to take are two-fold:

  • First, the push and pull factors influencing migration vary across regions of sending countries.
  • Second, we have focused our attention on wage differentials between countries as main determinant, overlooking the role of structural differences within sending countries.

The core data of the research come from manifests that recorded individual border crossings. These documents are known as Mexican Border Crossing Records and were used by American authorities to collect information about immigrants. The sample used in this research consists of 10,895 immigrants that crossed the border through eight ports of entrance from July 1906 to December 1908.

The results reveal that differences in the Mexico-US relative wage did not explain the migration flow. But differences in living standards and population size across Mexican municipalities mattered. On average, locations with low living standards and large populations represented a source of frictions in the Mexican labour market, pushing labourers to migrate.

In addition, the estimates show that the flow was consistently driven by the social capital formation in the destination – that is, immigrant networks. Just as found for recent periods, migrating to a county with a large Mexican community increased the net benefits of migration.

Therefore, for more than one hundred years, immigrant networks have represented a self-perpetuating social asset that provides information and assistance, which reduces the costs and risks of migrating.

The regional results reveal that there were two migration models at the time:

  • In the border region, distance costs and labour market potentials in the United States influenced the decision to migrate.
  • In contrast, migration from the Mexican central plateau was completely determined by immigrant networks and labour market pressures in Mexico.

Since 2010, Mexican migration to the United States has come to a standstill, although the salary gap remains at levels like those of the early twentieth century. Hence, the persistence of immigrant networks as the main driver of the Mexico-US migration raises the question of whether the convergence of real wages between home and host countries would be an effective mechanism to reduce or control migration.

An integral migration policy must consider the different incentives behind the decision to migrate as well as their evolution through time and across space. Only then, will we maximise the benefits of labour migration and minimise the problems derived from it.

Deindustrialisation in ‘troubled’ Belfast: evidence of the links between factory closures and sectarianism – and lessons from the community response

by Christopher Lawson (University of California, Berkeley)

This paper was presented at the EHS Annual Conference 2019 in Belfast.


The Shankill road, Belfast during the troubles. Available at Wikimedia Commons. 

My new research provides fresh insights into the relationship between industrial decline and sectarian conflict in late twentieth century Belfast, and increases our understanding of how communities respond to the loss of their economic base.

The poverty and deprivation that continues to afflict much of West Belfast is usually understood as a direct result of the sectarian ‘Troubles’ of the 1960s to 1990s, when ‘ancient’ ethnic and religious hatreds erupted and brought economic misery as investment fled.

But industrial decline actually predated the ‘Troubles’, and was a cause rather than an effect of sectarian tension. The linen industry, on which West Belfast had been built, shed tens of thousands of jobs in the 20 years following the Second World War, leading to some of the highest unemployment rates in the entire UK by the mid-1960s.

I argue that it was the social consequences of the collapse of the linen industry that made West Belfast neighbourhoods like the Shankill and the Falls such centres of conflict in the following decades. West Belfast communities were caught in a downward spiral, where unemployment and urban decay was exploited by those seeking to promote sectarian resentment, leading to violence, which in turn made the economic conditions even worse.

In addition to showing how deindustrialisation helped spur the ‘Troubles’ in West Belfast, my research also shows how new community organisations sprang up to fill the gap left by government and lead the effort to adapt to post-industrial world.

I focus particularly on the creation of the Shankill Community Council and Ardoyne People’s Assembly, on either side of the sectarian divide in West Belfast. These organisations are usually seen as outgrowths of the Troubles, focused on defending their communities from sectarian violence, but my research shows that their primary focus was actually on re-development and reversing economic decline.

These organisations recognised that the linen industry would not be returning, and instead focused on education, daycare, skills retraining and transport linkages. In communities where more than 70% of adolescents left school without any qualifications whatsoever, improved education was essential if young people were to build meaningful lives and resist the temptation to join sectarian paramilitaries.

The emphasis on quality daycare was part of a larger effort to reduce the barriers preventing women from entering the workforce as equals to men, as community leaders recognised that the idea of the ‘male breadwinner’ was a thing of the past.

Although the progress of these organisations was slow, their efforts helped to begin the process of economic and social recovery, and they set the agenda for government support in the post-Good Friday Agreement era. The Shankill Women’s Centre, an outgrowth of the Shankill Community Council, would receive significant government support from New Labour and from the new Northern Ireland Assembly, and it continues to provide subsidised daycare in the neighbourhood.

With deindustrialisation widely recognised as a contributing factor in the UK’s 2016 vote to leave the European Union and the election of Donald Trump, it is important that we understand the serious social and cultural consequences that such dramatic economic dislocation can have.

My research helps to provide a better understanding of the role of deindustrialisation in the outbreak of sectarian violence in Northern Ireland, but also shows how bottom-up social action can make a genuine difference in the process of recovery. In this way, it provides lessons that can be applied to struggling post-industrial communities across the Western world.

Unequal pay in Victorian Britain

by Chris Minns (LSE) and Emma Griffin (UEA)


Thames embankment, London, England. Available at Wikimedia Commons.

Women made a vital contribution to the labour force in Victorian Britain. Census evidence suggests that close to 40% of women in Britain were employed in the second half of the nineteenth century, which is roughly twice the rate found for the United States at the same time. This implies that the labour market earnings of women made a substantial contribution to the fortunes of many working-class households. 

But how did the industrial economy of mid-Victorian Britain treat women who sought work? It is well-known that women experienced large-scale occupational segregation with women excluded entirely from many professions and industries. Less well known, however, is how the pay of women evolved after 1850, particularly in relation to their male counterparts.  

In a new study, to be presented at the Economic History Society’s 2019 annual conference, we draw on the reports of wages and salaries paid between the 1850 and 1890 prepared by the Board of Trade. In total these sources contain over 9,000 wage quotations for male workers in industry, and well over 1,000 similar quotations for female workers. 

We use this information to compute the gender pay gap in Britain between 1850 and 1800, and to examine the structure of the disadvantages experienced by women at this time.  

Overall, we find that between 1850 and 1890, women in British industry had earnings a little more that 40% of male earnings in industry. The gender pay gap closes by only a few percentage points over the period we study, and it would appear that it is at least as large in the second half of the nineteenth century as what others have found for the first part of the Industrial Revolution between 1780 and 1850. 

While part of the explanation for the large pay gap is the exclusion of women from the best paid industries and trades, our preliminary work suggests that differences in the composition of employment between men and women can only account for a small fraction of the gender gap. 

When comparing matched wage quotations for men and women in the same location, industry, occupation and year, the gender pay gap is only modestly smaller, at 51%. Consistent with this finding, we do not find evidence of substantial gender pay gap differences between regions or industries that were major employers of women. 

What are the main implications of these findings? 

First, it appears that the dynamics of gender pay in late nineteenth century Britain were strikingly different than in the United States. The gender pay gap in UK industry at the end of the nineteenth century was about 15 percentage points larger than in American manufacturing, which saw a more noticeable narrowing over the century. These transatlantic differences in the relative price of women’s labour may have implications for the patterns of industrial development seen in Britain versus the United States. 

Second, the fairly uniform gender pay gap across British industry, despite notable differences in skill and strength requirements between occupations speaks to a pattern of broad-based labour market segmentation that worked to suppress women’s wages well before the spread of internal labour markets that and long-term contracts thought to formalise different pay structures for men and women.

Social mobility and inequality in the Republic of Venice, 1400-1700

by Guido Alfani (Bocconi University, Milan, Dondena Centre and IGIER)



The Wharf, Looking toward the Doge’s Palace, 1700s, by Luca Carlevaris. Available at Wikimedia Commons.

Recent research in economic history has unearthed previously unknown facts about the long-term trends in inequality. We now have, for at least some areas of Europe, continuous time series of key inequality indicators from around 1300.

These new data are changing the way in which we perceive economic inequality not only in the past, but even today – as a key lesson from history is that economic inequality (especially but not only of wealth) has a marked tendency for increasing over time, and only catastrophes on the scale of the Black Death or the World Wars managed to bring it down, albeit temporarily (see Figure 1).

The new historical evidence is also relevant to the debate about the long-term determinants of inequality growth. This seems to be independent, to a large degree at least, from economic growth. Other factors seem to have played a crucial role, including institutional factors and in particular (in the early modern period) the rise of the fiscal-military state.

These recent acquisitions, however, raise many questions about the actual impact on society of distributive dynamics. My current project funded by the European Research Council – SMITE: Social Mobility and Inequality across Italy and Europe 1300-1800 – is exploring at least some key aspects of the social impact and significance of inequality change.

In this context, particular attention is being paid to the case of the Republic of Venice, which is the object of the study to be presented at the Economic History Society’s 2019  annual conference. In the Republic of Venice, as seemingly was common throughout Europe, economic inequality tended to grow monotonically from the fifteenth century until the end of the early modern period (which is also the end of the Republic of Venice as a specific political entity).

Generally speaking, this inequality growth could not simply be considered the consequence of economic growth, as it also covered phases of economic stagnation. Indeed, the Italian domains of the Republic of Venice transitioned, over the period 1500-1900, from being one of the richest and most advanced areas of Western Europe, to being one of the poorest. Partly as a consequence of this, it is very unlikely that during the period, and especially from 1600 on, inequality growth could have taken place in a context of easy upward social mobility.

Our research aims to measure rates of socio-economic mobility in different periods, based on a range of case studies, including the large and very important city of Verona. Our results so far confirm that during the early modern period inequality growth came to be increasingly associated with more difficult upward socio-economic mobility.

This provides useful hints about the nature and the causes of inequality growth in pre-industrial Europe. We pay particular attention to the role played by state taxation in consolidating the relative position of the richest, while compromising the ambitions of upward mobility of other socio-economic groups. Our study is also one of the very first attempts at reconstructing household-level measures of social mobility for the pre-industrial period by means of extensive record linkage of the available sources and by using the standard methods of mobility studies.

The picture that we reconstruct suggests that from around 1600 or 1650, the Italian domains of the Republic of Venice were characterised at the same time by economic stagnation, growth in economic inequality, and low (and worsening) rates of social-economic mobility. This picture corresponds quite closely to the situation being faced by Italy and by other parts of southern Europe since the onset of the Great Recession in 2008 – which is definitely not a very encouraging scenario.


Alfani Chart 2

Source: Alfani, The top rich in Europe in the long run of history, Vox 15 January 2017

The Greek public debt restructuring of 2018 through the lens of history

by Olga Christodoulaki


The Residence of the Bank of Greece at the corner of the Streets Ionos Dragoumi and Tsimiski, Thessaloniki. Available at Wikimedia Commons.

In June 2018, relief was granted to Greece for the official sovereign debt by its Eurozone counterparts. But in spite of this recent agreement and a reduction by more than 50% in the face value of the debt held privately in March 2012, the sustainability of Greek public debt is still questioned and the uncertainty associated with this might easily impair economic growth.

This is not the first episode of Greek public debt restructuring, as I will discuss in research to be presented at the Economic History Society’s 2019 annual conference. In 1898, five years after a Greek government default, a debt compromise was achieved, providing for the restructuring of both internal and external sovereign debt. The cornerstone of this readjustment plan was the creation of a viable long-term plan for the servicing of public debt, which had reached nearly 230% of GDP by then.

Interest rate payments to bondholders of Greek external loans issued before the 1893 default were linked to specific public revenue streams earmarked exclusively for the service of these loans. These revenues assigned for the repayment of public debt were administered by the International Financial Commission and represented, in 1903 for example, approximately 46% of the total revenue of the Greek government.

Consequently, as Figure 1 shows, the yield paid to bondholders fluctuated from year to year within a band depending on the volume of those revenues; its floor being the minimum rate defined by the debt restructuring agreement and its ceiling the original coupon rate of the loan.

In addition, special attention was paid during the preparation of this debt readjustment plan to protect and indeed strengthen the National Bank, the central bank in Greece at the time. Domestic public debt denominated both in gold and drachmae and mainly held by the National Bank, was also restructured so as to strengthen its financial position.


My study argues that the provisions of the debt readjustment plan of 1898 – which it should be stressed have been completely ignored by research until now – should be taken into account in order to comprehend fully the improvement in the creditworthiness of the Greek government and consequently the terms of borrowing before the outbreak of the First World War.

The public debt readjustment arrangement of 1898 marked the beginning of a period of high capital inflows to the country including Greek diaspora capital and remittances. Moreover, it facilitated a carefully orchestrated return of the Greek government to the private markets in 1902. It is worth noting, however, that Greece did not avoid a further default in the early 1930s when the world economy collapsed.

The recent public debt relief granted to Greece by its Eurozone counterparts echoes the late nineteenth century restructuring of public debt agreement but lacks the credibility that the latter engendered. This time, the long-term sustainability of public debt depends on the commitment of the Greek government to achieve constant primary surpluses, every year, beginning from 2018 for two generations and also on privatisation proceeds.

This is a commitment that has been received with caution since it is neither a serious policy goal nor particularly realistic if history is anything to go by.

Sources of market disintegration in eighteenth century China

by Markus Eberhardt (School of Economics, University of Nottingham)


Altar Frontal (China (for European market)), 18th century. Available at Wikimedia Commons.

One of the seminal questions in world and Chinese economic history is why China, in contrast to Western Europe, failed to industrialise during the nineteenth century, leading to differential development paths commonly referred to as the Great Divergence.

Social and economic historians have tried to tackle this issue by identifying potential sufficient conditions for industrialisation. One candidate condition has been the degree of national or sub-national market integration within Asia and Western Europe on the eve of industrialisation. A long-held view maintained that Western Europe was characterised by integrated markets, which had taken root because of state-supported property rights institutions. China, in contrast, despite her unified political system, was said to have failed in creating a unified national market.

This hypothesis of differential levels of market integration has been seriously challenged more recently, most notably in the work of Kenneth Pomeranz (2000), who concluded that factor and product markets in late eighteenth century Western Europe were ‘probably further from perfect competition… than those in most of China.’

Shiue and Keller (2007) carried out a formal cross-continental comparison of rice markets in Southern China during 1742-95 with wheat markets in Europe in the eighteenth and nineteenth centuries, providing the first econometric evidence for Pomeranz’s conjecture of equivalent goods market integration in both regions.

Much of the subsequent research has adopted the conclusion that ‘in the late eighteenth century… long-distance [grain] trade in China operated more efficiently than in [continental] Europe’ (von Glahn, 2016).

In related work (Bernhofen et al, 2016) we use a number of alternative empirical methods (including the cointegration analysis employed by Shiue and Keller, 2007) along with higher frequency grain price data for China and Western Europe to provide consistent evidence for a substantial decline in Chinese market integration over time: by 1800, China’s grain markets were fragmented, including in the economically most advanced regions (Jiangnan).

Our empirical implementations account for general equilibrium effects widely acknowledged to have distorted earlier investigations of market integration using price data.

In our new study, to be to be presented at the Economic History Society’s 2019 annual conference, I and my co-authors (Daniel Bernhofen, Jianan Li and Stephen Morgan) bring together arguments for such an early decline in Qing grain market integration from the rich economic and social history literatures.

We use our estimates for market integration to test empirically one prominent factor: we investigate the role played by the unprecedented population growth and internal migration during the eighteenth century and its economic, social, political and environmental implications.

In studies of early modern Europe, population growth was found to go hand in hand with market expansion and increased integration. In China, population growth and its uneven regional distribution not merely limited the surplus grain available for trade, but exerted severe pressure on an inherently instable water control system pitting farming against flood prevention and the waterway transportation of goods, creating increasingly insurmountable challenges for water engineering.

In combination with rigid fiscal rules, population growth constrained the ability of the Qing state to govern this vast empire effectively. Local officials reacted to rising population pressure with ‘grain protectionism’, leading to temporary political borders, which further hampered the functioning of the market.

The narrative we develop is not that of a standard ‘Malthusian trap’, where an acceleration in pre-modern agricultural growth is followed by population growth that dilutes per capita resources and thus keeps the economy in a ‘low level equilibrium trap’. Instead, we describe an escalating ‘span of control’ problem, increasing the pressure on a small bureaucracy in the periphery as well as the core of the empire, caused by a rigid and underfunded state apparatus.


Figure: Population density growth and internal migration

Conf China Map



We plot the annualised population density growth rates (in percent) between 1776 and 1820 for 211 prefectures. Black solid lines indicate provincial borders. The dashed line marks the early eighteenth century ‘frontier’ between developed and developing areas of Qing China (Myers and Wang, 2002). Arrows indicate major internal migration flows (stylised representation) during the eighteenth century. The two Northern migration strands actually extend beyond Qing China proper into Xinjiang and Manchuria.



Population density data are taken from Cao (2000), information on eighteenth century migration flows from Eliott (2009: 147), Entenmann (1980: 41f), Ho (1959: 139ff), Lee and Feng (1999: 118), Mann-Jones and Kuhn (1978: 109f, 132), Myers and Wang (2002: Map 9), shapefiles from CHGIS version 6 (2016).