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Carrots and Coercion in Labor Mobility and Economic Development

Paper Session

Friday, Jan. 4, 2019 8:00 AM - 10:00 AM

Atlanta Marriott Marquis, L505
Hosted By: Cliometric Society
  • Chair: Noel Maurer, George Washington University

The Transatlantic Slave Trade, The South Sea Company and the Financial Revolution in Great Britain

Warren Whatley
,
University of Michigan
Gregory N. Price
,
Morehouse College

Abstract

The South Sea Company was a public-private corporation created by Act of British Parliament in 1711 to swap high-interest government debt for Company equity. The Company was at the heart of the British Financial Revolution that helped established Parliament’s credible commitment to repay its debts. The government also awarded the Company the international monopoly to supply slaves to the Spanish American colonies—the Asiento de Negros. We use historical slave trade and financial data to estimate the parameters of a Capital Asset Pricing Model to determine if Asiento-related slave trading increased risk-adjusted returns on South Sea Company stock. We find that Asiento-related slave trading created substantial positive returns on Company stock, and precisely when the government relied on the Company to refinance its debt. Contrary to previous literature, we find that Asiento-related slave trading was profitable and helped Britain win the 18th century race to empire against France.

Displacement and Development: Long Term Impacts of Population Transfer in India

Rinchan Ali Mirza
,
University of Namur
Prashant Bharadwaj
,
University of California-San Diego

Abstract

The 1947 partition of British India resulted in one of the largest, most rapid population transfers of the twentieth century. Using refugee presence by 1951 as a measure of partition-induced population transfer, and district level data on agricultural output between 1911-2009, we find that areas with more refugees had higher average yields, were more likely to take up high yielding varieties of seeds, and were more likely to use agricultural technologies. The increase in yields and use of agricultural technology coincide with the Green Revolution in India. Using pre-partition data, we show that refugee placement is uncorrelated with soil and water table characteristics, agricultural infrastructure, and agricultural yields before 1947; hence, the effects are not explained by selective movement into districts with a higher potential for agricultural development. We highlight refugee education and land reforms in refugee areas as two potential mechanisms that could be driving these effects.

Expropriation with partial compensation: Slaveholders' reparations and intergenerational outcomes

Johan Fourie
,
Stellenbosch University
Jeanne Cilliers
,
Lund University
Igor Martins
,
Lund University

Abstract

Can wealth shocks have intergenerational health consequences? We use the partial compensation slave owners received after the 1834 slave emancipation in the British Cape Colony to measure the intergenerational effects of a wealth loss on longevity. Because the partial compensation was uncorrelated to wealth, we can interpret the results as having a causal influence. We find that a greater loss of slave wealth had a negative effect on the longevity of both the generation of slave owners that experienced the shock and their children, but not for grandchildren. We speculate on the mechanisms for this intergenerational persistence.

When Colonization Goes South: Understanding the Reasons Behind the Failure of Wakefield’s Systematic Colonization in South Australia

Sumner La Croix
,
University of Hawaii
Edwyna Harris
,
Monash University

Abstract

Britain after the Napoleonic wars saw the rise of colonial reformers, such as Edward Wakefield, who had extensive influence on British colonial policy. A version of Wakefield’s “System of Colonization” became the basis for an 1834 Act of Parliament establishing the South Australia colony. We use extended versions of Robert Lucas’s 1990 model of a colonial economy to illustrate how Wakefield’s institutions were designed to work. Actual practice followed some of Wakefield’s principles to the letter, with revenues from SA land sales used to subsidize passage for more than 15,000 emigrants over the 1836-1840 period. Other principles, such as surveying land in advance of settlement and maintaining a sufficient price of land, were ignored. Initial problems stemming from delays in surveying and a dysfunctional division of executive authority slowed the economy’s development over its first three years and led to a financial crisis. These difficulties aside, we show that actual SA land institutions were more aligned with geographic and political conditions in SA than the ideal Wakefield institutions and that the SA colony thrived after it took measures to speed surveying and reform its system of divided executive authority.
Discussant(s)
John Deveraux
,
City University of New York-Queens College
Petra Moser
,
New York University
Leticia Abad
,
City University of New York-Queens College
Alan Dye
,
Barnard College
JEL Classifications
  • N3 - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy