New Berkeley Working Papers

The Berkeley Economic History Lab (BEHL) has just announced the launch of a new working paper series. BEHL was established in 2011 with funding from the Institute for New Economic Thinking (INET). I have certainly benefited from BEHL, mostly from the weekly seminar series, post-seminar coffee hours, faculty mentoring, and biweekly student seminar lunches. The working papers are contributed by visitors and other affiliates of the BEHL. Since "their circulation is intended to stimulate discussion and comment," I plan to use the blog as a venue to assist with that. I will put up a link and write a paragraph or so about each working paper as they appear, and invite you to read the papers that interest you and leave your comments and questions. I'll send the relevant authors a link to the comment thread. Two working papers are already up.

The first is "State Capacity and Long Run Performance" by Mark Dincecco and Gabriel Katz. State capacity refers to the combined extractive and productive capabilities of the state-- its ability to tax and to provide public goods and services. The concept has come to prominence in the development literature, where it is recognized that lack of state capacity is a limit to development. This is the theme of a 2011 paper by Timothy Besley and Torsten Persson who study current-day "fragile states" that are ineffective at taxing and providing basic services to citizens. Dincecco and Katz' paper studies state capacity from an economic history perspective, using four centuries of European data (1650-1913). They study the impacts of political transformations--particularly fiscal centralization and parliaments-- on extractive and productive capabilities, and in turn on economic growth.

The second is "Financing a Planned Economy: Institutions and Credit Allocation in the French Golden Age of Growth (1954-1974) " by Eric Monnet. The years 1945-1974 are called the "Golden Age of European Growth," yet they witnessed startlingly high levels of financial repression. Monet investigates this seeming discrepancy between high growth and financial distortion. He looks in detail at the planned ("dirigiste") economy of postwar France, where the "nationalization of credit" was a priority. The Planning office, the Bank of France, and semi-public credit institutions played decisive roles in allocating credit in accordance with national economic and social priorities. The state actively supported the development of bank credit. This paper also provides an original database and analyzes it to account for the role of finance in the French Golden Age.

Take a look at these new working papers and stay tuned for more in the BEHL series!