Call for Applications ESTER Research Design Course How to strengthen your dissertation project?

The European graduate School for Training in Economic and Social Historical Research (ESTER) is a European platform for postgraduate teaching. ESTER announces its annual Research Design Course (RDC) for economic and social historians on 28 – 30 October in Lyon (France) The ESTER network, established in 1991, involves more than 60 universities throughout Europe and offers high-level research training for PhD students in an international context. At present the network is organised by the N.W. Posthumus Institute, which is a graduate school for economic and social history in the Netherlands and Flanders. The Research Design Course of 2019 will take place at the École Normale Supérieure de Lyon and is sponsored by the LARHRA, Triangle and East Asian Studies Research Centres. This year’s edition will be organised by Claude Chevaleyre (Lyon Institute of East Asian Studies) and Bram Hoonhout (Radboud University). The Research Design Course (RDC) is a format promoted by ESTER since the late 1990s. The RDC assists students in setting up a high quality and well-designed plan for their dissertation under the guidance of a team of leading senior researchers whose task it is to provide comments and feedback.

The RDC is thus not a “course” in sense that an instructor will give a lecture or that you
will discuss historical theories in a seminar setting. Instead, it is centred on presentations
of the individual projects and the ensuing discussions on how to improve them.
You will therefore be asked to write a paper in which you discuss your Research Design.
The aim of this methodological reflection is to investigate the scientific procedures that
historians use to reach scientific explanations and to combine all analytical elements into
a synthetic and coherent historical account. In this paper, you will also prepare a detailed
work plan for the dissertation. The paper has a length of around 25 pages and should
provide the structure in which the remaining research for the dissertation will take place.
Subsequently, you will give a brief presentation during the conference, act as reporter,
chair and peer commentator for other papers, and will receive feedback from junior and
senior scholars in the field.

In this way, the RDC course offers PhD students help in sharpening and refining their
research questions, in strengthening the focus of their research, in increasing the
consistency of their overall dissertation plan, in making explicit the various theoretical
and methodological choices that have to be made in the course of the project, and in
improving the composition of the dissertation. The RDC course thereby aims at a better
awareness of research choices that need to be made.

Description and organisation of the RDC
The RDC consists of a 3-day workshop. Prior to the workshop, PhD students will prepare
a paper (of around 25 pages) according to a set of guidelines. During the workshop, each
paper will be examined in separate 70-minute sessions. Each session will begin with
comments prepared by one of the participating PhD students, followed by comments by
one of the senior commentators, after which a general discussion among all participants
will take place.

All papers must be circulated in advance; students need to read and prepare all papers to
be discussed in their group. This year a maximum number of 40 students can be admitted;
work will take place in three or four groups of students. A certificate will be awarded to
participants who have successfully completed the course.

Applications and admission PhD students should apply online and submit an 800-word abstract of the content of their dissertation project. A first selection will take place on the basis of the abstract. After this stage, PhD students who are accepted will be asked to follow a set of guidelines in order to write their research paper. The final admission to the course depends upon the following points: • the students must meet the deadline for submission of his/her paper; • the quality of the paper: the papers must be of sufficient academic quality, and the level of the English used in the paper must be sufficient. Dates and location The 2019 RDC will take place at the École Normale Supérieure in Lyon. The course will start with an informal welcome session on Sunday 27 October around 6 pm. The course will end on Wednesday 29 October around 4 pm. Students wishing to participate are requested to send in their application no later than 10 June 2019, using the online form. The selection of students will be completed by 21 June. Deadline for submission of papers by accepted students is 15 September 2019. Following that date, the papers will be made available to all participants.



Time path

18 April Call for Applications

10 June Deadline application

21 June Selection completed, applicants informed

15 September Deadline paper submission

6 October Papers online for reading

28-30 October RDC Lyon



Costs
There are no registration costs and accommodation (three nights; from Sunday to
Wednesday) will be covered by the organisers. Because of budgetary constraints, this
accommodation will consist of shared (twin) rooms. Most catering will be covered by the
organisation too, yet on Tuesday you will have to make your own dinner arrangements.
Travel arrangements to, from and within Lyon will also have to be organised and covered
by the selected participants (or their home institution) themselves.

Subsidies
Students who do not have travel budget or for whom financing would be an obstacle to
participation may be eligible for a travel subsidy. This is especially intended to encourage
participation of students from Eastern Europe. Please indicate this wish in your
application.

Contact
For inquiries concerning this course, please contact the education programme director of
ESTER: Bram Hoonhout (b.hoonhout@let.ru.nl)

How Britain unified Germany: Endogenous trade costs and the formation of a customs union

Nikolaus Wold is Full Profesor in economic
history at Humboldt University in Berlin

State borders can change due to both political and economic disputes. This column shows how the formation of the German state can be traced back to British political intervention at the end of the Napoleonic War. In preventing Russia from gaining territory westwards, Britain set in motion a series of events that gave Prussia strategic trade advantages. This led to the formation of Europe's first customs union (the Zollverein) and prepared the political unification of Germany.

The boundaries of states are the heart of many recent debates, be it the European refugee crisis, the Transatlantic Trade and Investment Partnership (TTIP), or Brexit (Snower and Langhammer 2019). After decades of stability, today we are again seeing heated discussions about the shape and extent of political borders. Clearly, borders are neither naturally given nor random. In Europe and elsewhere, the current state borders have been formed and changed over centuries, sometimes peacefully, often in bloody wars. In Huning and Wolf (2019), we look at the formation of the German nation state led by Prussia and trace it back to a change in borders decided at the Congress of Vienna in 1814/15. 

In a nutshell, we have two findings:

• First, the geographic position of a state can be a crucial factor for institutional change and development. 
• Second, the formation of the German Zollverein in 1834 under Prussian leadership was a truly European story, involving Britain, the Russian Empire, and the Belgian revolution of 1830/31. We show in particular that the Zollverein formed as an unintended consequence of Britain’s intervention in 1814/15 to push back Russian influence over Europe. 

In theory, why would the geographic position of a state relative to that of other states matter? Intuitively, it should matter as long as the costs of trade and factor flows depend on their routes. If a large share of my trade has to pass the territory of one or several neighbours, my trade and trade policy will depend on the trade policy of my neighbours. Moreover, if tariffs are levied not only on imports but also on transit trade, as was general practice until the Barcelona Statute of 1921 (Uprety 2006), policymakers face the problem of multiple marginalisation, which is well known from the literature on supply chains. In our work, we provide a simple theoretical framework (in partial equilibrium) to show how the location of a revenue maximising state planner will affect its ability to set tariffs. Some states can increase their tariff revenue at the expense of their hinterland. Next, we show that a customs union can be beneficial for a group of states exactly because it solves the problem of multiple marginalisation. 

A major challenge to testing our idea empirically is that a state’s political boundaries (and hence its location) do not change very often, and if they do, the change is unlikely to be unrelated to trade or factor flows. However, the formation of the German Zollverein in 1834 can be considered as a quasi-experiment. Let us briefly revisit this historical episode. At the end of the Napoleonic wars of 1792-1814/15, only Russia and the UK were left as major military powers. Habsburg, Prussia, and the defeated France attempted to consolidate their positions at the expense of the many smaller states that had just about survived the wars, notably the former allies of Napoleon such as Saxony and Poland. Overall, the negotiations at the Congress of Vienna in 1814 were dominated by military-strategic considerations between the two great powers. Russia wanted to expand westwards, Prussia was desperate to annex the populous Kingdom of Saxony, which bordered Prussia in the south and would create a large and coherent territory. To this end, Prussia was willing to give up not only her Polish territories to Russia, but also her positions and claims on the Rhineland (Müller 1986). This met stiff resistance from Britain, joined by Habsburg and France, which feared a new Russian hegemony on the continent – the ‘Polish Saxon question’. After weeks of diplomatic struggle, the outcome was a division of Saxony, another division of Poland and Prussia being established as the “warden of the German gate against France” (Clapham 1921: 98). Figure 1 shows the result of these negotiations. 

Figure 1 Outcome of the Congress of Vienna, 1814

The Prussian territory was split into an eastern and a western part, divided by the small Hessian states. “Berlin failed to get what it wanted and got what it did not want… The creation of a large Western wedge along the river Rhine was a British, not a Prussian, idea” (Clark 2007: 389). While this was initially considered a diplomatic disaster for Prussia, we also see from Figure 1 that Prussia now controlled large parts of Germany’s most important navigable waterways to the sea, the Elbe and the Rhine. 

Prussia started to take advantage of this position with the tariff law of 1818, which abolished all internal tariffs and established a uniform external tariff, including transit tariffs. From there on traders in the southern states were forced to either detour the large Prussian territory, typically over Hessian land, or accept the transit tollage. Given that in the early 19th century, transport on water was much cheaper than transport over land, this came at a large physical detour cost. According to Sombart (1902), the average freight cost per tonne-kilometre on water was 0.6-1.5% (!) of the freight cost on country roads, or 25% of that on paved state roads. But road construction was slow and expensive and railroad construction would not start before the 1840s. Hence trade was routed along waterways, especially trade in colonial goods, which had to be imported from overseas. 

In turn, revenue from colonial goods – notably sugar, tobacco, and wine – accounted for 80% of the Prussian tariff revenue in 1831 (Onishi 1973), and similar shares could be found elsewhere.  Prussia was interested in tariff revenue, but also in establishing a land bridge between the two parts of her territory. As Prussia started to negotiate a customs union with the Hessian states, this was vigorously opposed by the southern states (Bavaria and Württemberg), who feared becoming hostage to Prussian tariff policy. But it was equally opposed by Habsburg and Hanover (in personal union with the UK). Notably, the Habsburg chancellor Metternich feared that a customs union under Prussian leadership would be a first step towards a political expansion of Prussia. In hindsight we know that he was right. Nevertheless, Prussia succeeded in forming a customs union with Hesse-Darmstadt in 1828.

One major factor that limited the bargaining power of Prussia in the late 1820s was the fact that the Netherlands controlled Rotterdam, the mouth of the Rhine river. Trade on the Rhine was subject to tariffs and duties payable at Rotterdam, as well as staple rights and the requirement to use Dutch shipping companies (Spaulding 2011). It was the Belgian revolution and the prospective competition from an independent Belgium that led to an agreement between Prussia and the Netherlands to reduce these trade costs in March 1831. After this, transit trade over the land of Hesse-Cassel was sharply reduced. In August 1831, Hesse-Cassel joined the Prussian customs union, which provided the desired land bridge between the two Prussian territories. In 1833, Bavaria and Württemberg followed, and in 1834 the German Zollverein was formed. 

In our paper, we show that our theoretical framework can explain this series of events very well. First, controlling for a host of alternative explanations, we provide evidence that states for which the least-cost path to the North Sea or Baltic led via Prussia entered the Zollverein earlier. We also show that this transit captures the effect of distance to the ocean, which has been proposed as an instrumental variable for access to the Zollverein (Keller and Shiue 2014). Moreover, we use historical data on prices, freight rate, and market sizes to calibrate our theoretical model and simulate tariff revenues under the various customs unions. We can show how and why the formation of a customs union between Hesse-Darmstadt and Prussia in 1828 and again the opening of the Rhine trade in 1831 had large effects on tariff revenues of other states (Ploeckl 2015).  Finally, we simulate our model under counterfactual borders – what if Prussia had got what it wanted in 1815, namely, the entire Kingdom of Saxony at the expense of creating an independent Rhine-state? We show that with such borders, the German Zollverein would very likely not have been formed. Put differently, as a collateral damage to her intervention at Vienna in 1815, Britain unified Germany. 

References

Clapham, J H (1921), The economic development of France and Germany, 1815-1914, Cambridge: Cambridge University Press. 

Huning, T R, and N Wolf (2019), “How Britain Unified Germany: Endogenous Trade costs and the Formation of a Customs union”, CEPR Discussion Paper no. 13634.

Keller, W, and C H Shiue (2014), “Endogenous Formation of Free Trade Agreements: Evidence from the Zollverein’s Impact on Market Integration”, Journal of Economic History 74: 1168-1204.

Müller, K (1986), Quellen zur Geschichte des Wiener Kongresses 1814/1815, Bd. 23 of Ausgewählte Quellen zur deutschen Geschichte der Neuzeit, Darmstadt: Wissenschaftliche Buchgesellschaft. 

Onishi, T (1973), Zolltarifpolitik Preußens bis zur Gründung des deutschen Zollvereins. Ein Beitrag zur Finanz- und Außenhandelspolitik Preußens, Göttingen: Schwartz. 

Ploeckl, F (2015), “The Zollverein and the Sequence of a Customs Union”, Australian Economic History Review 55: 277-300. 

Snower, D, and R Langhammer (2019), “Untangling Brexit”, VoxEU.org, 7 January. 

Sombart, W (1902), Der moderne Kapitalismus, Bd 1, Die Genesis des Kapitalismus, Berlin: Duncker und Humblot. 

Spaulding, R (2011), “Revolutionary France and the Transformation of the Rhine”, Central European History 44: 203-226. 

Uprety, K (2006), The transit regime for landlocked states: international law and development perspectives, Washington DC: World Bank Publications.

Without coal in the age of steam and dams in the age of electricity: an explanation for the failure of Portugal to industrialize before the Second World War

Sofia Henriques is a postdoctoral fellow at Lund University

In a new EHES working paper, Sofia Henriques, Lund University, and Paul Sharp, University of Southern Denmark, examine the case of Portugal before the Second World War from a hitherto relatively little researched perspective. They thus provide a natural resource explanation for the divergence of the Portuguese economy relative to other European countries, based on a considerable body of contemporary sources. Their argument rests on two observations based on the periods before and after the First World War. The working paper is available here.

Paul Sharp is Full Professor at University of Southern Denmark

For the first period, they demonstrate that a lack of domestic resources meant that Portugal experienced limited and unbalanced growth during the age of steam. Imports of coal were prohibitively expensive for inland areas, which failed to industrialize. Coastal areas developed through steam but were constrained by limited demand from the interior. As can be seen from the figure below, coal thus never constituted a major proportion of Portuguese energy consumption.

Portuguese energy consumption by source 1850-2016 in gigajoules per capita

 Source: 1856-1959: Henriques (2009), with revisions to exclude bunker fuel. 1960-2016: Henriques and Borowiecki (2017), IEA (2015), FAO (2017), DGGE (2017) and PORDATA (2017). Primary electricity expressed by its heat content. See Appendix.

Second, they show that after the First World War, when other coal-poor countries turned to hydro-power, Portugal relied on coal-based thermal-power, creating a vicious circle of high energy prices and labor-intensive industrialization. The figure below gives some idea of how expensive electricity was in Lisbon compared to some other countries.

Electricity prices in 1923 and 1935 for selected countries, dollar cents

Sources: See Table 5, Exchanges rates are from Officer (2009).

They argue that this dependence on thermal/power was the result of (i) water resources which were relatively expensive to exploit; and (ii) path-dependency, whereby the failure to develop earlier meant that there was a lack of capital and demand from industry.

This vicious circle would only be broken during the 1950s and 1960s, a period not covered in their work. Neutrality during the Second World War led to an inflow of capital, which might be the reason why the state was then able to invest in a vast electrification plan using hydro-power, ensuring cheap energy for both old and new industries. However, it was already too late for hydropower to make a significant difference: by then the world had entered the age of cheap oil which democratized industrialization in many countries, meaning that endowments of energy were no longer an important prerequisite and source of growth.

Money and modernization in early modern England

Nuno Palma is an Assistant Professor
 at the University of Manchester

New EHES Working Paper by Nuno Palma (Manchester University) is available here.

Classic accounts of the English industrial revolution present a long period of stagnation followed by a fast take-off. However, recent findings of slow but steady per capita economic growth suggest that this is a historically inaccurate portrait of early modern England. This growth pattern was in part driven by specialization and structural change accompanied by an increase in market participation at both the intensive and extensive levels. These, I argue, were supported by the gradual increase in money supply made possible by the importation of precious metals from America. They allowed for a substantial increase in the monetization and liquidity levels of the economy, hence decreasing transaction costs, increasing market thickness, changing the relative incentive for participating in the market, and allowing agglomeration economies to arise. By making trade with Asia possible, precious metals also induced demand for new desirable goods, which in turn encouraged market participation. Finally, the increased monetization and market participation made tax collection easier. This helped the government to build up fiscal capacity and as a consequence to provide for public goods. The structural change and increased market participation that ensued paved the way to modernization. 

Economic consequences of state failure; legal capacity, regulatory activity, and market integration in Poland, 1505-1772

Mikołaj Malinowski is a Postdoctoral Research Fellow
at Utrecht University and Lund University

New EHES Working Paper by Mikołaj Malinowski (Lund University - Utrecht University) is available here.

What factors allowed certain regions of Europe to develop their market economies early on and what were the reasons for the relative stagnation of the less successful areas? Specifically, what was the role of the early-modern transition from feudalism to semi-centralised and relatively powerful territorial states in setting the stage for modern economic growth? Political institutions are argued to be crucial determinants of prosperity (e.g. Acemoglu and Robinson 2012). Many scholars identify the parliamentary form of governance and the rule-of-law as preconditions for the market economy (e.g. North and Weingast 1989). The ‘Little Divergence’ in pre-1800 economic development between England/Britain, the Netherlands, and the rest of Europe is often linked to the formation of territorial parliamentary regimes in the two successful countries (e.g. Van Zanden et al. 2012; Broadberry and Wallis 2017). The available GDP evidence suggests that both the British Glorious Revolution of 1688 and the Dutch Act of Abjuration of 1581 were followed by long periods of sustained economic growth. However, not all parliamentary regimes prospered. For example, the available GDP evidence shows that both the transition of Poland into a parliamentary republic in the 16^th century as well as the change from absolutism to a parliamentary form of government in Sweden in 1718, were followed by protracted economic decline (Bolt and Van Zanden 2014; Malinowski and Van Zanden 2017, Figure 1). The fact that not all preindustrial parliamentary regimes succeeded economically demonstrates that the consolidation of power around a parliament is an insufficient condition for sustained economic growth.

Figure 1: GDP per capita in 1990$PPP in all Northern-European early-modern parliamentary regimes.

Why did some pre-industrial parliamentary regimes prosper while others did not? According to Besley and Persson (2011), a state can promote prosperity only if it possesses (1) legal capacity denoting the authority and infrastructure to create and enforce the law and (2) fiscal capacity representing the means to finance its operations. Figure 2 presents a convenient summery of the core links between state capacity, parliamentary activity, and Smithian economic growth that are explored in this paper.

Figure 2: Conceptual framework based on the core theoretical relationships in the literature.

With this study, I contribute to the growing literature on the role of centralisation and state capacity in promoting economic growth and market development before 1800 (Bonney 1995; O’Brien 2011; Chilosi et al. 2018; Dincecco and Katz 2016; Dimitruk 2018; Epstein 2001; Johnson and Koyama 2017). I complement the earlier studies that predominantly focused on fiscal capacity with an original study of the impact of legal capacity. Specifically, I analyse the role that the Polish Diet played in developing an integrated domestic commodity market. Early modern Poland is uniquely suited to study the economic impact of the parliamentary regime. In the 16^th century, Poland both limited the authority of the king and experienced, in relative terms, a golden age of political centralisation under a strong parliament, the Seym. At the time, the Polish(-Lithuanian) Commonwealth became the biggest state in Europe covering the territories of present-day Poland, Lithuania, Ukraine, Latvia, Estonia, and Belarus. The Seym issued numerous regulations that began to change and unify the dissimilar, historical, regional, economic institutions across this vast country. In the mid-17^th century, a constitutional conflict over the mode of royal election led to the introduction of the liberum veto - the right of a single delegate to discontinue the Seym’s proceedings and nullify its decisions. The veto was used to prevent any further constitutional change. Moreover, by bribing the delegates to the parliament, Prussia, Austria, and Russia made frequent use of the veto to abort the Seym’s sessions and weaken the Polish state. This led to a lack of effective law-making at the central level of the state. This ‘historical experiment’ offers a rare opportunity to test if legal capacity and regulatory output of central institutions of governance stimulated pre-1800 market integration. Relying on the research of successful historical England/Britain and the Dutch Republic is insufficient to falsify the hypothesis that strong parliamentary regimes promoted markets.

Figure 3: Number of days a year Polish Seym and British Parliament were in session, 1505-1772.

Van Zanden et al. (2012) proposed to proxy the involvement of an early modern parliament by counting how many days it was in session each year. I present new data on the number of days the Polish Diet was in session each year (Figure 3). I complement this measure of legal capacity with an innovative new index of the Seym’s regulatory output based on an original study of its acts. I show that the right of individual delegates to abort the Seym’s sessions led to a lack of effective law-making. I demonstrate, that the use of vetoes was not driven by the market conditions but linked to the conflict over the mode of royal election. I discuss via which historical mechanisms, when active, the Diet and its regulations promoted market integration and how its inactivity rose the exchange costs. With the use of regression analysis, I identify that both (1) the number of days the Seym was in session and (2) its regulatory output stimulated price convergence. Moreover, I study the individual impact of various types of regulation. I provide evidence that the Seym, when active, lowered the exchange costs (rye price gaps) on the market by harmonising taxes and measures. Conversely, I identify that lack of parliamentary activity induced market disintegration. Figure 4 provides a convenient demonstration of some of the main results.

Figure 4: Standard confidence intervals of the impact of regulating each of the eight individual areas of regulation, analysis based on the three independent Polish price-gap series with Equation 4.

New ERC Horizon 2020 Starting Grant in Economic History: Spoils of War: The Economic Consequences of the Great War in Central Europe

Tamás Vonyó is an Assistant Professor
 at Bocconi University in Milan

Dr Tamás Vonyó has been awarded €1.49 million to conduct research on a 'Spoils of WAR' project, which aims to set a new standard in the economic history of the world wars by investigating how the First World War affected regional economic development and industrial organisation in the Habsburg Empire and its successor states. We can directly account for the impact of wartime resource allocation, independent from the outcomes of postwar political disintegration, using abundant, yet understudied, primary data on war contractors. We can detect how war spending affected the spatial concentration of industry, the economic structure of Habsburg regions, and business networks. Case studies on key industries can help to demonstrate how they perceived these changes and what strategies they developed to address them. The project will break through traditional boundaries between economic and business history and integrate the analytical tools of both disciplines. It will shift focus in the recent economic history of the wars from the Second to the First World War and use modern methods in historical economic geography and comparative business history.

The Dondena Centre for Research on Social Dynamics and Public Policy at Bocconi University will host the project between 2019 and 2023. The research team will include two post-doctoral researchers in economic history and two junior research fellows in business history. The vacancies for the two post-doctoral researchers are available here and here (deadline 1.December 2018).

European Historical Economics Society (EHES) Congress, Paris, France, August 29th-31st, 2019

Conference Call for Papers and Sessions Submission Deadline – Midnight (GMT), Thursday January 31st, 2019 The thirteenth EHES Congress will be held at the Paris School of Economics. The Conference Programme Committee invites proposals for sessions and individual papers on any aspect of European or global economic history covering a wide range of periods, countries and regions. In order to allow as many scholars as possible to participate, each participant will be limited to give only one presentation (he/she can also be a co-author in other papers presented at the conference, as long as another co-author participates and presents each of these paper). The Society encourages submissions from young scholars. There will be at least 10 bursaries of € 300-400 each to help PhD students cover the costs of travel and accommodation. Further details will be available soon on the Conference website. Requirements: Paper proposals shall include an abstract not exceeding 500 words, along with the authors' institutional affiliations and email addresses and the keywords on the period, country/region and topic. Session proposals shall include a short presentation of the session objectives, along with the abstracts (max 500 words each) of 3 to 5 papers. All submissions should be uploaded by January 31st, 2019 via the conference’s website:  https://ehes2019.sciencesconf.org/ Additional Information: All submissions will be acknowledged upon receipt. Notices of acceptance will be sent to the corresponding authors by April 1st, 2019. Venue: Paris School of Economics, 48 boulevard Jourdan, Paris, France. Program Committee: Herman de Jong (University of Groningen) Kerstin Enflo (Lund University) Pierre-Cyrille Hautcoeur (EHESS and Paris School of Economics) Sibylle Lehmann-Hasemeyer (Hohenheim University) IMPORTANT DEADLINES: January 31st, 2019: submission deadline April 1st, 2019: notification of acceptance July 31st, 2019: end of registration