Tag Archives: method

Do business historians need a theory of the archive?

Why business historians need a constructive theory of the archive

by Stefan Schwarzkopf (Copenhagen Business School)(ssc.mpp@cbs.dk)

URL: http://EconPapers.repec.org/RePEc:pra:mprapa:46650

Abstract: Archival records are a constitutive element of business historical research, and such research, in turn, is fundamental for a holistic understanding of the role of enterprise in modern capitalist societies. Despite an increasing debate within business history circles about the need to theorize the historian as author and creator of narratives, a fuller reflection on the uses and limitations of the archive in business historical research has not yet taken place. This article takes its lead from theories of organisational epistemology, and asks to what extent business historians are trapped by an outdated, realist methodology and epistemology which is in danger of ignoring the multiple roles that archives play in their knowledge production.

Review by Stephanie Decker

Stefan Schwarzkopf’s paper on business archives (circulated by NEP-HIS on 2013-05-11) is a welcome addition to an increasingly lively debate about the future of business history. Originally published in the Business Archives Journal, it is now also available as an MPRA working paper. Even more refreshingly, it is a theoretical and more qualitatively focused discussion, which have remained rare on lists such as NEP-HIS, which are, as the name (New Economic Papers) suggests, dominated by debates based on the methodological apparatus of economics. In business and economic history, whether historians are quantitatively or qualitatively oriented, archives are central to their research. While business historians, the majority of whom work qualitatively, usually fail to discuss their methods at all, economic historians, mostly quantitatively oriented, provide detailed accounts of their numerical data and analytical procedures. Yet many also employ analysis based on historical sources in order to construct their models or to interpret their results; this aspect of gaining historical insight is however not discussed in methodological terms. The very familiarity of historians with their main research setting – the archive – apparently breeds contempt. Or disinterest at the very least.
This is precisely what Schwarzkopf highlights in his contribution: the need for a “fuller reflection of the uses and limitations of the archive in business historical research”. For this he blames the predominantly realist epistemology of many business historians even though other historians apparently have moved away from this in a variety of turns. Business history has certainly been somewhat divorced from the major trends and theoretical developments in mainstream history, even though this is perhaps less true in some continental European countries, where business historians remain integrated in history departments. More often than not they may be located in a variety of different departments, such as departments of social science or economics, as well as business schools. If business history ought to engage more with theoretical turns, the question today has become – which one? And from which discipline?
Schwarzkopf is certainly right to argue that a theory of the archive is necessary and important for business historians. It is in fact by now a much wider debate already (Ferguson, 2008; Stoler, 2009), and again one to which business historians have not contributed. But in this epistemological debate, even he seems to take too much for granted at times, first and foremost the very object of the debate. What do we think is an archive? “[A]rchives are organisations, they require institutional support.” Are archives really a ‘thing’, something tangible, an organisation, a location? To Michel Foucault archives were first and foremost structures that shaped the material, an approach that Schwarzkopf suggests greater engagement with at the end of the paper. And whatever empiricist historians may think about abstract Foucaultian constructs, in this digital, virtual age this definition is if anything gaining in relevance and reality. Are the two physical and conceptual notions of ‘archive’ mutually exclusive? Arjun Appadurai (2003) reminds us in “Archive and Aspiration” that they might be. He is interested in a very different type of archive, which is a personal locus of memory, identity and belonging for migrant communities. Postcolonial research is faced precisely with this absence of effective organisations that span past and present, thus the kind of archive that Schwarzkopf and many other business historians take for granted.


For business history, this is in fact also a more common issue than one would expect, at least for those who research the history of consumption or small firms in less concentrated industries. There are more theoretical options even for those cases, as the discussion by Newton and Carnevali (2010) shows. Because business historians are frequently dependent on private collection that are not institutionalised like their public counterparts, they have perhaps more in common with postcolonial approaches to a privatised past than they realise, because they are similarly weaving a patchwork that needs to contend with many gaps in the records (Decker, 2013). These issues cannot be neatly packaged into global North and South. What about the CEOs who offer their private papers to researchers? Archives come in increasingly different shapes and sizes. Can we have a theory that does justice to this variety? Or do we need many different theories?
Some of the most recent challenges to a stable notion of ‘archive’, such as digitisation, highlight the complexity of the issues. How does digitisation affect how archives are used, and vice versa? Will it determine what the collection stands for, more so than the entire body of files? Perhaps not a new problem for libraries that contain individual high value items that eclipse the totality of their collection, but certainly a phenomenon that will spread with digitisation. Just consider decisions to digitise parts of archival collections that are of greater public interest, such as World Bank’s digitisation of the Robert McNamara’s files. Faced with the impossibility of digitising an archive as vast as theirs, files of greater relevance to present-day audiences are prioritised, negating the need for people to physically enter 1818 H Street, NW, and engage with the overall collection. Is this a manipulation by the archivists, or is this it the pressure of demand shaping organisational responses?
Clearly neither history nor memory is simply determined by what was kept in the past. Memory is much more powerfully influenced by what the present is looking for in the past. Schwarzkopf highlights the important issue of ‘falsification’ in the example of Elsevier expunging undesirable products from the collection. The artificial boundaries between our knowledge of the past and present that have been taken for granted are called into question by new approaches such as memory studies. Here, history and archives are equated with “storage memory […] an ‘amorphous mass’ of unused and unincorporated memories that surround the functional memory like a halo (Tamm, 2013: 462 citing ; Assmann, 2011: 125).” The area of social remembering ought to be far more prominent in discussions of corporate history, while the theoretical implications of ‘mnemohistory’ still await critical engagement.
So what kind of archive are we talking about? The ground is shifting beneath us as we speak, as the meaning of the word “archive” is changing inexorably. Ask your undergraduate students, who might tell you the Financial Times database is an archive. And why not? “Digital humanities” are gaining ground, and debates about how this will change methodology and theory have just begun. And with technological advances, a postcolonial loss of organisational control is never far. Recent complaints in the UK newspaper the Guardian about the variable cost of archival research do not quite address the long-term impact of historical research via digital camera – that it allows all of us to build personal digital archives, removed from the oversight of institutionalised archivists. Business historians are by no means the only ones affected by these trends. If we ask whether we need a theory of the archive, surely nowadays we must first of all talk about how we define an archive, and whether business historians may actually be dead.

storageview
Schwarzkopf is right to criticise the widespread bias towards those easier-to-research, large corporate archives. Funnily enough, so has the more theoretically self-conscious Management and Organizational History (Mills and Helms Mills, 2011). But sometimes he overstates his case, for example when he writes: “If there is no archive that for example allows us to study the involvement of a specific company in arming Nazi Germany, or in exploiting slave labour in the Caribbean, then it has no space in academic discourse.” While clearly intended to be ironic, it is difficult to ignore the massive boom in German business history of the 1990s and 2000s in uncovering the Nazi past of German firms in the aftermath of the scandal surrounding Swiss bank accounts. The history of slavery and Atlantic history more generally has certainly been more significant outside business history (see for example Childs, 2002), but there are business historians engaging with these debates all the same (Haggerty, 2010). Painting the kettle too black detracts from the valid point that we need a greater epistemological engagement with our primary locus of research, the archive.
Not only has this debate been missing, as Schwarzkopf rightly points out, but there are also new approaches to theorizing the archive that go beyond the limitations of a short piece. This paper is one of the first to raise some of these fascinating questions for the practice of business history, and will hopefully spark a debate about the status of archival work in the field.

References

Appadurai, A. (2003) Archive and Aspiration. In: Brouwer J (ed) Information is Alive. Rotterdam: V2 Publishing.
Assmann, J. (2011) Cultural Memory and Early Civilization: Writing, Remembrance, and Political Imagination, Cambridge: Cambridge University Press.
Childs MD. (2002) Master-slave rituals of power at a gold mine in nineteenth-century Brazil. History Workshop Journal 53: 43-72.
Decker, S. (2013) The Silence of the Archives: Postcolonialism and Business History. Management and Organisational History 8: 155-173.
Ferguson, K.E. (2008) Theorizing Shiny Things: Archival Labors. Theory & Event 11.
Haggerty S. (2010) Risk and risk management in the Liverpool slave trade. Business History 51: 817-834.
Mills, A.J. and Helms Mills, J. (2011) Digging Archaeology: Postpositivist Theory and Archival Research in Case Study Development. In: Piekkari R and Welch C (eds) Rethinking the Case Study in International Business and Management Research. London: Edward Elgar, 342-360.
Newton, L. and Carnevali, F. (2010) Researching Consumer Durables in the Nineteenth Century: The Case of the Piano. Business Archives: Sources and History 101: 17-29.
Stoler, A.L. (2009) Along the Archival Grain: Epistemic Anxieties and Colonial Common Sense, Princeton: Princeton University Press.
Tamm, M. (2013) Beyond History and Memory: New Perspectives in Memory Studies. History Compass 11: 458-473.

To Get Published or Not to Get Published: Challenges and Opportunities in Economics from 1970 to Present.

Nine Facts about Top Journals in Economics

David Card (University of California, Berkeley) (card@econ.berkeley.edu)

Stefano della Vigna (University of California, Berkeley) (sdellavi@econ.berkeley.edu)

Abstract

How has publishing in top economics journals changed since 1970? Using a data set that combines information on all articles published in the top-5 journals from 1970 to 2012 with their Google Scholar citations, we identify nine key trends. First, annual submissions to the top-5 journals nearly doubled from 1990 to 2012. Second, the total number of articles published in these journals actually declined from 400 per year in the late 1970s to 300 per year most recently. As a result, the acceptance rate has fallen from 15% to 6%, with potential implications for the career progression of young scholars. Third, one journal, the American Economic Review, now accounts for 40% of top-5 publications, up from 25% in the 1970s. Fourth, recently published papers are on average 3 times longer than they were in the 1970s, contributing to the relative shortage of journal space. Fifth, the number of authors per paper has increased from 1.3 in 1970 to 2.3 in 2012, partly offsetting the fall in the number of articles per year. Sixth, citations for top-5 publications are high: among papers published in the late 1990s, the median number of Google Scholar citations is 200. Seventh, the ranking of journals by citations has remained relatively stable, with the notable exception of the Quarterly Journal of Economics, which climbed from fourth place to first place over the past three decades. Eighth, citation counts are significantly higher for longer papers and those written by more co-authors. Ninth, although the fraction of articles from different fields published in the top-5 has remained relatively stable, there are important cohort trends in the citations received by papers from different fields, with rising citations to more recent papers in Development and International, and declining citations to recent papers in Econometrics and Theory.

Keywords: Publications, Top-5 Journals, Economics

URL http://www.nber.org/papers/w18665.pdf

Review by Anna Missiaia

This working paper was distributed by nep-his on 2013-01-12 and contains some information that might be of use to academics engaged in economics related disciplines. In particular, it should be read by young and mid-career academics whose future is still highly dependent on the number of their publications and the ranking of the journals where they publish. This survey by David Card and Stefano della Vigna, both from the Department of Economics of UC Barkeley, provides several facts and comments about articles published in top economics journals from 1970 to today.

The paper considers the top-5 economics journals, namely the American Economic Review (AER), Econometrica (EMA), the Journal of Political Economy (JPE), the Quarterly Journal of Economics (QJE), and the Review of Economic Studies (RES). All the articles published between 1970 and 2012 have been tracked looking at the number of authors, the length of the article and the number of citations. The number of submissions to each journal from 1990 onwards has been collected as well in order to compute acceptance rates.  The first two facts that emerge from this article are that the number of submissions per year almost doubled between 1990 and 2012 and that of articles published declined from 400per year to 300 per year. These first two facts will appear particularly grim to those who are in the early stages of their academic career, as they boil down to a decrease of acceptance rate from 16% to 6% today. However, this tendency is contrasted by a rise of the average number of co-authors from 1.3 to 2.3 in the same period. Finally, the length of the articles has increased three-fold from 1970 to today.

David Card – Class of 1950 Professor of Economics (UC Berkeley)

These first three facts are worth to be analysed together. It is the opinion of card and Della Vigna that the increase of the number of co-authors is a response to the more restrictive policy by journals on publication. The reason for teaming-up is that publications with one or multiple authors have the same weight in terms of career. Therefore, if acceptance rate decreased, the number of papers authored by each scholar has decreased less than that. The dramatic increase of the length of articles is interpreted by the authors as an improvement in the quality of research, which is due to both more selectivity and to joint work of scholars. Moving to the citations front, the readers will be glad to hear that whenever they will manage to get published on a top-5 journal,  this will make them extremely popular, although it will take a while. Papers published today have a lower number of citations compared to the ones published in the in the 1990s, which reminds us that it takes years to accumulate citations. However, if you compare the papers published in the 1970s to those of the 1990s, they have fewer citations. This is probably  a sign of the quality increase in papers that we have seen from the 1990s onwards. The ranking of journals in terms of citations has been fairly stable over the past decades, suggestion a sort of stickiness in the relative reputation of journals (the notable exception is the QJE that climbed four positions and became first). The last fact to report is that the number of citations depends on the field: more empirical fields (Development and International Economics) tend to have more citations from recent papers while more theoretical fields (Econometrics and Economic Theory) still have more citations from older papers.

Stefano Dellavigna – Professor of Economics (UC Berkley)

In conclusion, this survey on publications on the top-5 journals in economics tells us that publishing has become tougher,  it requires higher quality of the papers, longer papers and collaboration among scholars to pass the harsh judgements of referees and editors of these journals. However, the glory received from the publication in terms of citations and career seems to be worth the suffering.

On the effects of income tax to the private businesses

Income Taxation and Business Incorporation: Evidence from the Early Twentieth Century

By Li Liu (li.liu@sbs.ox.ac.uk), Centre for Business Taxation, University of Oxford

URL: http://d.repec.org/n?u=RePEc:btx:wpaper:1205&r=his

Abstract

If the corporate income tax is set at a different rate from non-corporate income tax, it can play an important role in a firm’s choice of organizational form. The impact and interdependency of income tax incentives are crucial factors to take into account when designing efficient tax policies. In this paper I exploit the substantial variation in income taxes across U.S. states in the early twentieth century to estimate these sensitivities. The potential endogeneity of state taxes is addressed using an IV approach. The results demonstrate that the relative taxation of corporate to personal income has a significant impact on the corporate share of economic activities. Raising the entrepreneur’s tax cost of incorporation by 10% decreases the mean corporate share of economic activities by about 11-18%. In addition, higher personal tax rates may affect the share of corporate activities through tax evasion and tax progressivity.

Review by Beatriz Rodríguez-Satizábal

What are the implications of income tax on the organizations? As Li Liu claims in this paper distributed by NEP-HIS on 2012-10-20, the interplay of corporate and personal income taxes are central to tax policy design. As we have all witnessed, the new century has been marked by a turbulent corporate world. Politicians, economic-policy makers, and citizens are calling for new regulation and control over the giant corporations ruling the economies of most countries.

After almost a century of dealing with corporations, the issue is still which is the best way to keep the corporations within the limits of what is right for a country’s economy without having a negative effect on the firm’s growing path. The fact that the taxation lies in the heart of the relation between the businesses and the rest of the society, implies that its understanding needs both sides of the story (even shown from different perspectives): the policy-maker decision on how, when, and whom to tax; and, the effects of taxation in the structure, productivity, and revenues of the firm. The former commonly studied, and the latest still open to include case studies of firms and countries.

CNN Money online / 20 September 2011

Studying the case of the United States during the first two decades of the twentieth century, Liu brings together a period of tremendous changes in the income regimes –including the introduction of the income taxes (corporate in 1909, personal in 1913)- with the appearance of the first well-known big corporations. In other words, this paper is a step forward to fill the gap in the literature on the contribution of income taxes in the spread of corporate forms during an early period.

Using a dataset that includes the tax rates, the corporate share of establishment, employment, and production in the manufacturing sector, Liu builds a theoretical framework that starts with a simple model to illustrate how firms make decisions about whether to incorporate based on comparison of the profits they are likely to obtain from each organizational form (p. 7). This offers a result that shows the complexity of the business decisions and the reality which the policy-maker has to deal with: the taxation of firms differs by organizational form.

Interestingly, Liu adds to the discussion the degree of incorporation making a case on the economic importance of corporations and the fact that a great number of firms incorporate in response to tax incentives, rather than productivity options. Therefore, there is a strong relationship between business incorporation and income taxes when the big transformation occurred.

In other words, firms were not keeping it simple for the policy-maker! As a dynamic unit, the decision on the organizational form they were going to take while growing depended not only on the complexity of the production, the financial options available, or the size of the markets, but also on how they relate with the taxation system that at the end could increase or decrease the degree of incorporation.

Being this intuition not new for those who study the evolution of firms, this paper adds data to a methodological approach that combines the advances of the corporate governance on the structure of the firm and the accounting concern on how to deal with what they have to give back to the society.

Linking History and Management Discourse: Epistemology and Method

Seizing the Opportunity: Towards a Historiography of Information Systems

Nathalie Mitev (n.n.mitev@lse.ac.uk) and François-Xavier de Vaujany (devaujany@dauphine.fr)

Abstract: Historical perspectives are only timidly entering the world of IS research compared to historical research in management or organization studies. If major IS outlets have already published history-oriented papers, the number of historical papers – although increasing – remains low. We carried out a thematic analysis of all papers on History and IS published between 1972 and 2009 indexed on ABI and papers indexed in Google ScholarTM for the same period. We used a typology developed by theorists Usdiken and Kieser (2004) who classify historical organisation research into supplementarist, integrationist and reorientationist approaches. We outline their links with the epistemological stances well known in IS research, positivism, interpretivism and critical research; we then focus on their differences and historiographical characteristics. We found that most IS History papers are supplementarist descriptive case studies with limited uses of History. This paper then suggests that IS research could benefit from adopting integrationist and reorientationist historical perspectives and we offer some examples to illustrate how that would contribute to enriching, extending and challenging existing theories.

URL: http://EconPapers.repec.org/RePEc:hal:journl:halshs-00671690

The Silence of the Archive: Post-Colonialism and the Practice of Historical Reconstruction from Archival Evidence

by Stephanie Decker (s.decker@aston.ac.uk)

Abstract: History as a discipline has been accused of being a-theoretical. For business historians working at business schools, however, the issue of methodology looms larger, as it is hard to make contributions to social science debates without explicating one’s disciplinary methodology. This paper seeks to outline an important aspect of historical methodology, which is data collection from archives. In this area, postcolonialism has made significant methodological contributions not just for non-Western history, as it has emphasized the importance of considering how archives were created, and how one can legitimately use them despite their limitations.

URL: http://EconPapers.repec.org/RePEc:pra:mprapa:37280

Review by Bernardo Bátiz-Lazo

In his blog post entitled Theory and Historians, Andrew Smith points to a recent article in The Economist on the role of conceptual frameworks in history. Smith notes how some people are ‘…fundamentally hostile to the application of social theory to the craft of history’ and the comments to his post point to an interesting debate along these lines within the pages of the Economic History of Developing Regions journal.

The papers reviewed in this blog entry dig deeper into this issue while, at the same time, illustrate a trend concern on how to strengthen the links between historians and management scholars. Both these papers were circulated by NEP-HIS on 2012-03-21. Other examples include a similar paper by Mitev & de Vaujany on history and management information systems, Jari Eloranta’s Quantitative methods in business history: An impossible equation?, Amedeo Lepore’s New research methods of business history as well as Geoff Jones’ and Walter Friedman’s editorial in the Business History Review A Time for Debate. Smith, Jones & Friedman, the authors below as well as myself, sit within a social sciences faculty and more to the point, most are employed by a business school. Thus, explaining and even justifying our research to management scholars has not only conceptual implications but also practical ones as such as dealing with the issue of history journals having lower citation impact scores; and even more mundane, issues about promotion and allocation of research budgets.

Nathalie Mitev

Coming from an information systems background, the paper by Mitev and De Vaujany offers an interesting epistemological schema to explore the premise that ‘..management and organization studies have experience a move towards History’ while ‘[s]earching for theoretical and methodological benefits…’. Their concern is how to deal with ‘research [which] tries to include historical variability but still tends towards deterministic and universalist explanations.’ Based on the much celebrated framework by Behlül Üsdiken & Alfred Kieser’s History in Organisation Studies, Mitev and De Vaujany set on relating epistemological viewpoints of positivism, iterpretativism and cricial theory to corresponding historiographical methods.

François-Xavier de Vaujany

First there are supplementarist approaches where historical ‘context’ is simply added as a complement to common positivist approaches, still focusing on variables but with a longer time span. Examples of supplementarist, they say, are to be found in new institutionalism studies, which have become more ‘historical’ by studying a smaller number of variables over a longer period. But these, they say, lack the rich contextual evidence of case studies. Secondly, one finds integrationists or a full consideration of History with new or stronger links between organisation studies and the humanities (including history, literary theory and philosophy). Examples, they say, include most of the work around business history as ‘[b]usiness historians have progressed to realise the potential of their work to inform contemporary managerial decision-making.’ Thirdly, there are the reorientationistor post-positivist studies, which examine and reposition dominant discourses (such as progress or efficiency) and produces a criticism and renewal of organization theory itself, on the basis of history. Management history and history of management thought are said to be representatives. However,they add, here the logic of economic efficiency has superimposed onto the narrative of historians, that is, other potential avenues such as gender, culture and ethics have been disregarded in favour of a purely economicist narrative.

Mitev and De Vaujany then engage in very interesting an epistemological discussion of the three approaches and how can historical studies relate and/or inform different areas of management discourse. This is worth read as it is indeed, food for thought. I will thus make no attempt to summarise it. Nevertheless, the paper does progress while trying to find the prevalence of each of the three named approaches within research in information systems (IS). This through a content analysis of peer-reviewed journal articles which were identified by combining the ABI bibliographic database and Google Scholar:

The journals chosen had information systems as their primary focus as opposed to management science, computer science or information science. We selected journals whose principal readership is intended for those involved in the IS field… We do not claim that the survey is exhaustive; nor do we assume that a more comprehensive survey (e.g. including conference proceedings or using other databases) would deliver different results. The analysis involved the identification of all research papers in ABI that might broadly be defined as historical perspective on information systems. Using a further search on Google Scholar, we double checked on primary analysis in order to confirm general tendencies and identify complementary references, used in our discussion. Therefore, in our survey of relevant literature our intention is to focus on material that is published in outlets specifically targeted as IS.

At this point I grew a bit dissapointed by the paper by Mitev and De Vaujany. Ultimately only 64 papers were identified. For me, these represented the use of history as a method within the IS field. This should by no means be disregarded (more below). It is an interesting excerise in itself. But I thought that could have considered journals where historians of computing publish. I mean outlets such as the IEEE Annals of the History of Computing where Campbell-Kelly, Haigh and Heide (all of these are authors that Mitev and De Vaujany cite in their paper) regularly publish. I also felt more could be done about method and methodology in history.

Stephanie Decker – Aston University

Here is where the paper by Decker
fits in nicely. I had the fortune of hearing her present it at the M6 Business History Workshopat Coventry University. In comparison with Mitev and De Vaujany, Decker largely side steps epistemological issues to tackle head on how to explain what historians do in the archives and the issues that one faces in confronting surviving records of a particular organisation or event. This explanation is particularly poignant as she chooses to illustrate through her own work in Africa.

‘Triangulation’ and dealing with the issue of selection is part and parcel of most readers of this blog. I guess it does not need further explanation. But to be fair, Decker does present the topic in a new light and it is worth even for the most experience researcher to review her arguments and refresh some of the issues. As often things we take for granted are not examined in sufficient detail.

But the above does suggest there is a group of people who are seriously thinking how best to make history and management studies interact. Whether this should also translate into active presence in management journals and broad interest, peer-reviewed outlets is also part of the question. I am one of those who firmly believe that we as business historians have a serious contribution to make to the present conversation in management studies. As has been noted elsewhere by Ludovic Cailluet:

For those of us business historians who work in business schools/management departments, to publish in management journals is very important. One solution is to find “mainstream” or “pure players” co-authors who are interested in your data, and skills and who could help you with the format and describe methodology in a way that would answer the demands of management journals. Mixed methods (quanti/quali) are becoming very trendy lately in the management field. There is an opportunity.

Indeed, Business Historyhas initiated a series of special issues that offer social scientists an opportunity to explain how their work gels with the

Mustafa Özbilgin – editor of the British Journal of Management

discipline. But the opposite is not necessarily true. There is little or no representation of business historians in mainstream journals (hence the relevance of the paper by Mitev and De Vaujany above). Mustafa Özbilgin, general editor of the British Journal of Management, concurs:

You are right in spotting that business history have been rather under represented in the journal. There are a number of reasons for this. First business historians typically do not offer review service to the BJM nor do they typically submit papers. I don’t know the reasons for this. You may wish to seek explanations also within the business history community. BJM publishes only empirical pieces which draws on robust data, both of which are specific disciplinary constructs I am aware.

Dissecting epistemology and method of history is thus interesting and relevant for those aiming to build bridges outside our specialist area.

Financial crises and financial reforms in Spain: What have we learned?

By Pablo Martín-Aceña, Ángeles Pons & Concepción Beltrán

URL: http://d.repec.org/n?u=RePEc:cte:whrepe:wp10-01&r=his

Like the rest of the world, Spain has suffered frequent financial crises and undergone several changes in its regulatory framework. There have been crises that have been followed by reforms of the financial structure, and also troubled financial times with no modification of the regulatory and supervisory regime. In various instances, regulatory changes have predated financial crises, but in others banking crises have occurred without reference to changes in the regulatory regime. Regulation and supervision has been usually absent in the XIXth century, while in the XXth century policy makers have been more active and diligent. Moreover, all major financial crises have been followed by intense financial restructuring, although as elsewhere banking restructuring and interventions not always have been successful (in fact, the cases of failures and mixed results overcome the successful cases). The paper provides a short history of the major financial crises in Spain from 1856 to the present, and also reviews the main financial reforms and the distinctive regulatory regimes that have been in place in this last 150 years time span.

This paper is representative of a series of recent contributions in a number of ways: first, the financial crisis of 2007-9 has opened opportunities to highlight the role of historians to help formulate public policy. Second, there is more to the financial crisis than events around 1929 and the so-called “Atlantic continuity”. As the authors argue, there are lessons to be learn even from economies in the “periphery” such as Spain (which even at times of  “isolation” it has seen drops in real income and industrial production as a result of international events). Third, I think the authors summarize the crux of the discussion here:

But can we really prevent financial crises? Can we design a potent regulatory framework capable to assure the stability of the financial system against all kind ofeconomic events?