Please use this identifier to cite or link to this item: http://dx.doi.org/10.25673/103183
Title: State formation and market integration : Germany, 1780-1830
Author(s): Albers, HakonLook up in the Integrated Authority File of the German National Library
Pfister, UlrichLook up in the Integrated Authority File of the German National Library
Issue Date: 2023
Type: Article
Language: English
Abstract: The rise of modern states is an important factor for economic development. We test the effects of territorial consolidation and the increase in legal capacity on market integration. The political transformation of Germany in the wake of the Napoleonic Wars, which reduced territorial fragmentation and transformed former semi-autonomous estates to sovereign polities, serves as a natural experiment. We apply a difference-in-differences framework to a new dataset of grain prices and show that territorial consolidation reduced trade costs conditional on trade reforms that replaced heterogenous internal duties by a unified system of external tariffs. The effect was equivalent to a reduction of price gaps by 31 percent. Cities that were part of Prussia both before and after the Wars and experienced trade reform saw a reduction in price gaps of similar magnitude. By contrast, there was no market integration in late-reformer states such as Hanover and Saxony. Trade reforms were the main channel through which territorial consolidation fostered market integration.
URI: https://opendata.uni-halle.de//handle/1981185920/105135
http://dx.doi.org/10.25673/103183
Open Access: Open access publication
License: (CC BY 4.0) Creative Commons Attribution 4.0(CC BY 4.0) Creative Commons Attribution 4.0
Journal Title: Journal of comparative economics
Publisher: Academic Press
Publisher Place: Orlando, Fla.
Appears in Collections:Open Access Publikationen der MLU

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