------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (May 2008)

Timothy J. Hatton, Kevin H. O'Rourke, and Alan M. Taylor, editors, 
_The New Comparative Economic History: Essays in Honor of Jeffrey G. 
Williamson_. Cambridge, MA: MIT Press, 2007. ix + 417 pp. $40 
(cloth), ISBN: 978-0-262-08361-4.

Reviewed for EH.NET by Dan Bogart, Department of Economics, 
University of California, Irvine.


It is a testimony to Jeffrey Williamson that so many influential 
scholars have contributed to a book honoring his career. The list of 
contributors reads like a 'who's who' in comparative economic 
history. In the opening chapter, Timothy Hatton, Kevin O'Rourke, and 
Alan Taylor summarize the 'the New Comparative Economic History' and 
Williamson's contribution to it. In a nutshell, this line of research 
analyzes the sources of economic growth, the importance of 
institutions, and the impact of globalization by making comparisons 
between actual economies. An illuminating contrast is made with early 
cliometrics, which addressed questions by constructing 
counterfactuals with the help of theory and calibration. There is no 
doubt that comparative research is making contributions to core 
questions in economic history. As a survey of the chapters reveals, 
comparative economic historians have an incredible amount of data at 
their disposal and when combined with modern empirical tools much can 
be learned. Still there are some problems or challenges that need to 
be kept in mind. One complication is that much cross-country or 
cross-regional variation cannot be meaningfully accounted for with 
standard variables. Another is that few variables can be taken as 
exogenous in the long-run, making identification quite complicated. 
Lastly, more theory is needed to understand how economic and 
political processes evolve over the long run.

The main contribution of the book is to offer a sample of the latest 
research in comparative economic history. The sample is not random to 
be sure, but the chapters do cover a wide range of issues -- 
migration, income convergence (and divergence), inequality, 
international trade, and international finance -- all of which have 
been central to Jeffrey Williamson's research. Most of the 
contributions are fairly specialized and address a particular issue. 
William Collins (chapter 7) uses micro-census data from 1940 to 2000 
to document that the educational convergence of the southern U.S. was 
largely driven by the higher education attainment of southern-born 
children and supplemented by the absorption of high human capital 
in-migrants. The chapter makes several contributions to the 
literature on migration and education in the "New South." Leah Platt 
Boustan (chapter 11) shows that the nineteenth century migration of 
Russian Jews to the U.S. can be explained by the U.S. unemployment 
rate and the stock of the Jewish population in the U.S., while 
religious violence in Russia had modest long-run effects. Her chapter 
would be of interest to scholars studying the Jewish Diaspora and the 
estimation of immigration flows.

Several chapters are devoted to income convergence, divergence, and 
inequality. Robert Allen (chapter 1) compares real wages in India and 
Europe over the long-run and finds they were similar until the 
seventeenth century, when a divergence began, particularly in 
comparison to England. The chapter offers new insights on the timing 
of the Great Divergence. Greg Clark (chapter 2) uses a calibrated 
model of the British economy to argue that population growth accounts 
for the structural differences between Britain and its European 
competitors, not the productivity growth associated with the 
Industrial Revolution. The chapter makes a contribution to recent 
literature on the formal modeling of the British economy from 1780 to 
1860. Leonardo Prados de la Escosura (chapter 12) presents new 
estimates of inequality and poverty in Latin America since 1850. They 
show that inequality increased steadily from the late 1800s to the 
1970s, while poverty counts declined, largely due to economic growth. 
This chapter will be of interest to those who study the dynamics of 
growth, inequality, and poverty over the long-run. George Boyer 
(chapter 13) shows there was significant convergence in non-income 
measures of living standards across the Atlantic economy from 1870 to 
1930. He argues that improvements in the 3 l's -- longevity, 
learning, and leisure -- helped to slow emigration from northwestern 
Europe to the New World in the 1900s. The results suggest the need 
for broader measurements of welfare in the first era of 
globalization. Cormac O Grada (chapter 14) examines the divergence 
and convergence of welfare measures in Britain and the Netherlands 
from 1500 to 1850 and Ireland and Italy from 1950 to 2000. The 
chapter quantifies the higher welfare gains from rapid initial growth 
followed by slower subsequent growth compared to slow initial growth 
followed by rapid growth. His chapter makes a contribution to the 
literature on the welfare consequences of "economic miracles."

Several more chapters are devoted to commodity market integration, 
international trade, and protection. Suleyman Ozmucur and Sevket 
Pamuk (chapter 3) find mixed evidence for commodity market 
integration across Europe between 1500 and 1800. Tests based on 
coefficients of variation and cointegration show no evidence of 
integration for rice, sugar, honey, and butter, and partial support 
for integration in wheat and olive oil. Their findings have relevance 
for the "When Did Globalization Begin" debate. Giovanni Federico and 
Karl Gunnar Persson (chapter 4) revisit the issue of integration in 
world wheat markets by studying the variance in prices from 1800 to 
2000. They find that much of the cross-national variance was due to 
differences in wheat prices between free-trade and protectionist 
countries and among protectionist countries. Their findings will be 
of interest to the growing literature on the determinants of market 
integration. Kevin O'Rourke and Alan Taylor (chapter 8) provide 
evidence that in land abundant economies greater democracy raised 
tariffs, and in labor abundant economies greater democracy lowered 
tariffs. They also find that in countries with high capital to labor 
ratios greater democracy lowered tariffs. Their chapter contributes 
to the literature which confronts historical data with trade and 
political economy models. Timothy Hatton and Jeff Williamson (chapter 
9) investigate why trade was more restricted compared to immigration 
in the first era of globalization and trade was less restricted 
compared to immigration in the second era of globalization. They 
argue that tariffs were a more important revenue source in the 
nineteenth century than today and that policy backlashes against 
immigration were more muted in the nineteenth century because of the 
limited franchise, developmental coalitions, and party politics. 
Their chapter suggests that the first era of globalization can offer 
some interesting insights on the modern immigration debate.

Two chapters deal with international comparisons of productivity. 
Alan Olmstead and Paul Rhode (chapter 5) study how improvements wheat 
breeding in the nineteenth century prevented yields from 
significantly declining as production shifted to colder and drier 
places. Using case studies from several countries, they show how 
wheat breeding became a global enterprise with an exchange of ideas 
between every continent. Their analysis emphasizes a somewhat 
forgotten aspect of the first globalization: international knowledge 
transfers. Using cross-country regression analysis, Gayle Allard and 
Peter Lindert (chapter 15) find evidence that employment protection 
legislation and product market regulation reduced employment and 
productivity since the 1960s. They also find that coordinated wage 
setting and welfare state transfers either increased employment and 
productivity or did little to reduce them. This chapter contributes 
to the broader literature on the efficacy of Anglo-American 
institutions versus Continental European institutions.

Finally, there are two chapters analyzing financial markets from a 
comparative perspective. Richard Grossman (chapter 6) shows that bank 
capital to asset ratios declined in most countries from 1840 to 1940. 
Cross-country regression analysis reveals that banking crises 
increased capital to asset ratios, but government regulations, like 
minimum capital requirements, had little influence. This chapter 
shows convergence in a key variable across banking systems, and 
suggests the benefits of comparative research in banking history. 
Holger Wolf and Tarik Yousef (chapter 10) examine the timing of exit 
from the Gold Standard during the Great Depression. They find that 
greater deflation or recession hastened exit, as did the exit of 
trading partners. Interestingly, greater political instability slowed 
exit from the Gold standard. Their results should be of interest to 
scholars studying the determinants of monetary policy in the Great 
Depression.


Dan Bogart is an assistant professor of economics at the University 
of California, Irvine. His research focuses on government policies 
towards the infrastructure sector in Britain and throughout the world 
in the eighteenth and nineteenth centuries. Recent publications 
include "Nationalizations and the Development of Transport Systems: 
Cross-Country Evidence from Railroad Networks, 1860-1912" 
(forthcoming, _Journal of Economic History_); "Turnpike Trusts and 
Property Income: New Evidence on the Effects of Transport 
Improvements and Legislation in Eighteenth Century England," 
(forthcoming in the _Economic History Review_); and "Inter-modal 
Network Externalities and Transport Development: Evidence from Roads, 
Canals, and Ports during the English Industrial Revolution" 
(forthcoming in _Networks and Spatial Economics_).

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