Preliminary Programme

Scholars increasingly stress that borders persistently increase transaction costs and impede trade. We examine the roles of political and ethnic borders in the integration of a paradigmatic multi-ethnic state, Yugoslavia. We compile and analyse annual grain prices from 173 urban markets spread across Yugoslavia before and after the First World War. The market-pair panel database yields over 500,000 observations. We find that the effect of political and ethnic borders weakened over time, and finally vanished after political unification. Our findings suggest a contingent rather than persistent border effect (Show less)

This paper explores how and why import-substitution industrialization during the Great War provided one of the largest boosts to both heavy and light industries in East-Central Europe since the onset of the industrial revolution in the early 19th century. This paper is built on case studies of industrial enterprises from Hungary that managed to profit from total war even as the Austro-Hungarian economy suffered from shortages. It situates these cases in comparison with German firms in order to show how lax taxation, the dependence of governments on industrialists, and corporate maneuvering created “war millionaires”, a class of profiteers in an otherwise shrinking economy. Sizeable corporate profits were not an exception, and fit with broader trends of imperial expansion after 1916 that placed East-Central Europe in the forefront of German economic expansion plans. This research uncovers the hidden world of corporate maneuvering in the war economy based on company statistics, correspondence among bankers and accountants, government papers, and reports by angry journalists who demanded transparency. (Show less)

On the Austro-Hungarian home front, the Great War of 1914 was marked by epidemics, endemic food shortages and spiralling food prices. And a very active black market. In a desperate attempt to stem the rising inflation, the imperial authorities cracked down on all market activity that involved either offering or accepting prices above the officially-set maximum. Black marketeers were tried in court and given, as the war dragged on, increasingly harsh sentences. Which we happen to know since the imperial regime instituted, in 1915, a naming-and-shaming policy (which continued well after Armistice day and the dissolution of the Habsburg state). So, the judgments had to be reprinted in local newspapers (as classified advertisements paid for by the defendants). Such ads, published in Slovenian-language newspapers of the day, form the backbone of a quantitative reconstruction of the first-world-war black markets in present-day Slovenia – describing both the price formation and the social dimensions of illicit commerce and its prosecution. Historical newspapers were combined with additional sources which have been so far overlooked by cliometricians: official price lists as well as a diary by an outstandingly well-informed individual, Fran Mil?inski; who had access to various information channels: as an active consumer seeking goods on the black market, as a novelist and satirist of critical acclaim as well as a judge trying black marketeers. (Show less)

The quantitative studies on the Habsburg war economy are antique and focus on macroeconomic accounts. We have a relatively good understanding of macro movements such as inflation, unemployment, or national income. We have statistical evidence on structural change in employment and production. There is a handful of contemporary studies on individual industries and the regulations governing transportation or raw material and food supplies. By contrast, we know very little about the allocation of economic resources between regions, industries, and between individual firms and business groups. We aim to reduce this knowledge gap by exploiting a unique database, the vast inventory of war contractors that the Imperial War Ministry complied in early 1918. It catalogues 19,000 firms and records their location, main product lines, the total value of deliveries, and the value of war bonds that they had subscribed until the end of 1917. The two main advantages of the source are that it was strictly confidential, and thus unlikely to be manipulated, and that it reported data at the firm level, which we can aggregate both by industry and region using the classifications of prewar and interwar censuses. The accuracy of the value of deliveries was assured by two parallel sources of reporting: the mandatory reports of the contractors and the records of the local military procurement agencies.
Together with two other primary sources, the internal report of the war ministry on the personnel of its suppliers and the Compass yearbooks that report data on the operative locations of larger manufacturers, and using complementary information on official contract prices, the data on war contracts allows us to reconstruct the allocation of war spending by region and industry groups within each region of the empire. We use GIS to map the spatial concentration of military spending in different industries. These reconstructions will enable us to measure the impact of war spending on regional development and restructuring in the former Habsburg economies. (Show less)