We investigate whether income inequality affects subsequent growth in a cross-country sample for 1965-90, using the models of Barro (1997), Bleaney and Nishiyama (2002) and Sachs and Warner (1997), with negative results. We then investigate the evolution of income inequality over the same period and its correlation with growth. The dominating feature is inequality convergence across countries. This convergence has been significantly faster amongst developed countries. Growth does not appear to influence the evolution of inequality over time. Outline

https://www.econstor.eu/bitstream/10419/81822/1/02-28.pdf

Economic growth and income inequality

Some scholars suggest that the Middle East's oil wealth helps explain its failure to democratize. This article examines three aspects of this “oil impedes democracy” claim. First, is it true? Does oil have a consistendy antidemocratic effect on states, once other factors are accounted for? Second, can this claim be generalized? Is it true only in the Middle East or elsewhere as well? Is it true for other types of mineral wealth and other types of commodity wealth or only for oil? Finally, if oil does have antidemocratic properties, what is the causal mechanism?The author uses pooled time-series cross-national data from 113 states between 1971 and 1997 to show that oil exports are strongly associated with authoritarian rule; that this effect is not limited to the Middle East; and that other types of mineral exports have a similar antidemocratic effect, while other types of commodity exports do not.The author also tests three explanations for this pattern: a “rentier effect,” which suggests that resource-rich governments use low tax rates and patronage to dampen democratic pressures; a “repression effect,” which holds that resource wealth enables governments to strengthen their internal security forces and hence repress popular movements; and a “modernization effect,” which implies that growth that is based on the export of oil and minerals will fail to bring about die social and cultural changes that tend to produce democratic government. He finds at least limited support for all three effects.

Does Oil Hinder Democracy

where A represents the magnetic vector potential, is an integral of the hydromagnetic equations. This -integral made it possible to formulate a variational principle for the force-free magnetic fields. The integral expresses the fact that motions cannot transform a given field in an entirely arbitrary different field, if the conductivity of the medium isconsidered infinite. In this paper we shall show that the full set of hydromagnetic equations admit five more integrals, besides the energy integral, if dissipative processes are absent. These integrals, as we shall presently verify, are I2 =fbHvdV, (2)

Proceedings of the National Academy of Sciences

It is widely believed that current disparities in economic, political, and social outcomes reflect distinct institutions. Institutions are invoked to explain why some countries are rich and others poor, some democratic and others dictatorial. But arguments of this sort gloss over the question of what institutions are, how they come about, and why they persist. They also fail to explain why institutions are influenced by the past, why it is that they can sometimes change, why they differ so much from society to society, and why it is hard to study them empirically and devise a policy aimed at altering them. This 2006 book seeks to overcome these problems, which have exercised economists, sociologists, political scientists, and a host of other researchers who use the social sciences to study history, law, and business administration. It presents a multi-disciplinary perspective to study endogenous institutions and their dynamics.

/pdf/institutions-and-the-path-to-the-modern-economy-4dlla029fs.pdf

Institutions and the path to the modern economy

Virtually all models of the household assume that the allocation of resources is Pareto efficient. Within many African households, agricultural production occurs on many plots controlled by different members of the household. Pareto efficiency implies that factors should be allocated efficiently across these plots. I find, in contrast, that plots controlled by women are farmed much less intensively than similar plots within the household controlled by men. The estimates imply that about 6 percent of output is lost because of inefficient factor allocation within the household. The paper suggests a new approach to modeling intrahousehold allocation consistent with the empirical results.

/pdf/gender-agricultural-production-and-the-theory-of-the-2qev0ck25u.pdf

Gender, Agricultural Production, and the Theory of the Household

How the Credit Market in Old Regime Paris Forces Us to Rethink the Transition to Capitalism

Why should historians—and especially French historians—pay attention to economic history? After all, isn’t most of it written by economists? And aren’t their methods and concerns alien to most historians? In short, can’t it just be ignored? 

We say no. It would be a mistake to ignore economic history, particularly for French historians. Indeed, some of the best recent work in economic history concerns France, and although much of this scholarship has been overlooked by historians, it bears upon issues at the heart of French history: the nature of politics under the Old Regime, the strategies that women pursued in French society, and the origins and course of the French Revolution. This research speaks directly to French historians, but even when economic historians address questions in economics, what they say has important implications for French history. In recent years, their work has overturned older Marxist and Malthusian models of French society, models that still linger on in the background of much cultural history. In the place of these models, economic historians have fashioned a new understanding of French agriculture and peasant society; of French industry and demography; of the French fiscal and financial systems; and, above all else, of economic growth and stagnation in France up to the twentieth century—all matters that touched the lives of French men and women in the past.

New Work in French Economic History

Heresy Proceedings in Languedoc, 1500-1560

Smith, Clifford W. Jr., and Jerold B. Wainer. 1979. "On Financial Contracting: An Analysis of Bond Covenants." Journal ofFi11a11dal Economics 7(2): 117-61. Strang, David, and Sarah A. Soule. 1998. "Diffusion in Organizations and Social Movements: From Hybrid Corn to Poison Pills." Annual Review ofSociologi; 24(1998), 265-90. Tenenbaum, Shelly. 1993. A Credit to Their Commrmiti;: Jeruisft Lo1111 Societies in the United States 1880-1945. Detroit: Wayne State University Press. TI1ompson, Elizabeth Lee. 2004. T11e Reco11str11ctio11 of Southern Debtors: Bankruptcy after flte Civil War. Athens: University of Georgia Press. Treacy, WilliamF., and Mark S. Carey. 1998. "Credit Risk Rating at Large U.S. Banks." Federal Reserve B11/lefi11 November: 897-921. Uzzi, Brian. 1999. "Embeddedness in the Making of Financial Capital: How Social Relations and Networks Benefit Firms Seeking Financing." American Sociological Review 64(4): 481-505. Uzzi, Brian, and Jaines Gillespie. 2002. "Knowledge Spillover in Corporate Financing Networks: Embeddedness, Network Transitivity, and Trade Credit Performance." Strategic Mnnagement fo11r11a/ 23(7): 595--618. Uzzi, Brian, and Ryon Lancaster. 2003. "Relational Embeddedness and Learning: The Case of Bank Loan Managers and Their Clients." Management Science 49(4): 383-99. Wall, Alexander. 1919. T11e Banker's Credit Manual. Indianapolis: Bobbs-Merrill. Weinberg, Harold R. 1982. "Commercial Paper in Economic Theory and Legal Ifutory." Kentucky Law Journal 70(3): 567-92. Woo, Jung-En. 1991. Race to fhe Swift: State and Finance in Korean Industrialization. New York Columbia University Press. Wright, Robert E. 1999. "Bank Ownership and Lending Patterns in New York and Pennsylvania, 1781-1831." Business History Review 73(1): 40--60. Yates, JoAnne. 1989. Control Thro11gl1 Co1111111111icatio11: The Rise of System in American Manngement. Baltimore, Md.: Johns Hopkins University Press. Zinbarg, Edward D. 1975. "The Private Placement Loan Agreement." Financial Analysts Jo11r11al 31(1): 33-35. Chapter 9

The Role of Trust in the Long Run Development of French Financial Markets

How a vast network of shadow credit financed European growth long before the advent of banking

	Prevailing wisdom dictates that, without banks, countries would be mired in poverty. Yet somehow much of Europe managed to grow rich long before the diffusion of banks. Dark Matter Credit draws on centuries of cleverly collected loan data from France to reveal how credit abounded well before banks opened their doors. This incisive book shows how a vast system of shadow credit enabled nearly a third of French families to borrow in 1740, and by 1840 funded as much mortgage debt as the American banking system of the 1950s.

	Dark Matter Credit traces how this extensive private network outcompeted banks and thrived prior to World War I?not just in France but in Britain, Germany, and the United States?until killed off by government intervention after 1918. Overturning common assumptions about banks and economic growth, the book paints a revealing picture of an until-now hidden market of thousands of peer-to-peer loans made possible by a network of brokers who matched lenders with borrowers and certified the borrowers' creditworthiness.

	A major work of scholarship, Dark Matter Credit challenges widespread misperceptions about French economic history, such as the notion that banks proliferated slowly, and the idea that financial innovation was hobbled by French law. By documenting how intermediaries in the shadow credit market devised effective financial instruments, this compelling book provides new insights into how countries can develop and thrive today.

Philip T. Hoffman

Papers

How the Credit Market in Old Regime Paris Forces Us to Rethink the Transition to Capitalism

New Work in French Economic History

Heresy Proceedings in Languedoc, 1500-1560

The Role of Trust in the Long Run Development of French Financial Markets

Dark Matter Credit: The Development of Peer-to-Peer Lending and Banking in France