Tuesday, 20 January 2015

Contracts and cooperation: The relative failure of the Irish dairy industry in the late nineteenth century reconsidered

New EHES working paper

Eoin McLaughlin is a Leverhulme
 Early Career Fellow at University 
of St. Andrews
Ireland was one of the major dairying exporters on the London market in the early nineteenth century but lost its position of pre-eminence to Denmark by the close of the century. The question Henriksen, McLaughlin and Sharp seek to address is why the establishment of cooperative creameries in Ireland failed to halt the relative decline of her dairy industry. Henriksen, McLaughlin and Sharp compare the Irish experience with that of the market leader, Denmark, and shows how each adopted the cooperative organisational form, but they show that an important difference was institutional. Specifically, the two countries differed regarding the enforcement of vertically binding contracts, which are considered to be of vital importance for the successful operation of cooperatives.

Henriksen, McLaughlin and Sharp trace key court cases involving cooperatives in Ireland that were sued by their members. They find continuing uncertainty regarding the validity of these contracts up until Irish independence.

Cooperative and non-cooperative creameries in Ireland 1908

Another key difference between Denmark and Ireland was the existence of a strong proprietary sector which was strongly opposed to cooperation (map 1), this led to increased competition for scarce milk supplies in the Irish countryside. This, combined with the inability to enforce vertically binding contracts and poor social capital, ultimately led to the relative failure of the Irish dairy sector.

This blog post was written by Eoin McLaughlin, Leverhulme Early Career Fellow at University of St. Andrews
The working paper can be downloaded here: http://www.ehes.org/EHES_71.pdf

Thursday, 15 January 2015

The Heavy Plough and the Agricultural Revolution in Medieval Europe.

New EHES working paper

Did the heavy plough – as suggested by Lynn White Jr. and many others – lead to economic development during the Middle Ages? This question is investigated in a new EHES working paper by Andersen, Jensen and Skovsgaard, University of Southern Denmark.

Fig 1:  (a) the old plough, the ard,
and (b) the heavy plough
During the Medieval epoch the heavy plough spread across Europe. Heavy ploughs had a number of advantages compared to the old plough known as the ard (see Figure 1). These advantages derive from the addition of the mouldboard, which was used to turn the soil. By turning the soil, high-backed ridges were created. This was useful on poorly drained clay soil, as the ridges improved drainage. Turning the soil also improved weed control on these soils, since the ard provided insufficient damage to root system. Other advantages include e.g. bringing up lower level soil in which percolating water tended to concentrate plant nutrients. Hence, by allowing for better field drainage and access to the most fertile soils, the heavy plough stimulated food production and, as a consequence, “population growth, specialization of function, urbanization, and the growth of leisure” (White 1962, p. 44).

It is widely believed that the new plough had its breakthrough around AD 1000. Andersen, Jensen and Skovsgaard use this breakthrough year and the regional distribution of clay soil in a difference-in-difference setup in order to investigate whether the heavy plough did in fact lead to increased economic development after AD 1000 in areas that stood to benefit the most from the new technology.
Fig 2: Clay soils and the establishment of towns in Denmark.

Using establishment of towns in Denmark (see Figure 2) and cities in Europe as a measure of economic activity, the paper shows that regions more suitable for the heavy plough developed more strongly after its breakthrough (see Figure 3). In the study of Denmark the heavy plough explains more than 40 % of the new towns established between AD 1000 - AD 1300. In the case of Europe it explains more than 15 % of the new cities during the same period.

Fig. 3. The effects of the heavy plough on the establishment of Danish towns for each 25 year period

Overall, the paper corroborates the hypothesis that the heavy plough mattered for economic development. This suggests that increases in agricultural productivity can be a powerful driver of development.

The blogpost was written by Christian Skovsgaard, PhD Student, Department of Business and Economics at University of Southern Denmark.

The paper can be downloaded here: http://www.ehes.org/EHES_70.pdf