Empire effects : the case of shipping

I have been trying, for some time now, to circle an issue that we can consider to be a cousin of the emerging “state capacity” literature (see Mark Koyama’s amazing summary here). This cousin is the literature on “empire effects” (here and here for examples).

The core of the “empire effect” claim is that empires provide global order which we can consider as a public good. A colorful image would be the British Navy roaming the seas in the 19th century which meant increased protection for trade. This is why it is a parent of the state capacity argument in the sense that the latter concept refers (broadly) to the ability of a state to administer the realm within its boundaries. The empire effect is merely the extension of these boundaries.

I still have reservations about the nuances/limitations of state capacity as an argument to explain economic growth. After all, the true question is not how states consolidate, but how they create constraints on rulers to not abuse the consolidated powers (which in turn generates room for growth). But, it is easy to heavily question its parent: the empire effect.

This is what I am trying to do in a recent paper on the effects of empire on shipping productivity between 1760 and 1860.

Shipping is one of the industry that is most likely to be affected by large empires – positively or negatively. Indeed, the argument for empire effects is that they protect trade. As such, the British navy in the 19th century protected trade and probably helped the shipping industry become more productive. But, achieving empire comes at a cost. For example, the British navy needed to grow very large in size and it had to employ inputs from the private sector thus crowding-it out. In a way, if a security effect from empire emerged as a benefit, there must have been a cost. The cost we wish to highlight is the crowding-out one.

In the paper (written with Jari Eloranta of Appalachian State University and Vadim Kufenko of University of Hohenheim), I argue that, using the productivity of the Canadian shipping industry which was protected by the British Navy, the security effect from a large navy was smaller than the crowding-out from high-levels of expenditures on the navy.

While it is still a working paper which we are trying to expand and improve, our point is that what allowed the productivity of the Canadian shipping industry (which was protected by Britain) to soar was that the British Navy grew smaller in absolute terms. While the growth of the relative strength of the British Navy did bolster productivity in some of our tests, the fact that the navy was much smaller was the “thing in the mix that did the trick”.  In other words, the empire effect is just the effect of a ramping-down in military being presented as something else than it truly is (at least partly).

That’s our core point. We are still trying to improve it and (as such) comments are welcomed.

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An overview of India-China boundary disputes

I have a new paper that has just been published in Asian Affairs. Here is an excerpt:

Questions over the India-China border are not a new phenomenon. They are asked whenever there is a Sino-Indian state visit. Despite having close to $100 billion of trade between them, China and India have failed to bring their frontier disputes to an end. In the 1980s and 1990s it was thought that the increasing economic cooperation between the two countries would act as a prompt to resolve their political disputes, but it has not. Military stand-offs and confrontations between border guards from India and China occur at regular intervals. To address their boundary disputes, they have engaged in frequent dialogues (17 rounds of focused dialogues can be counted between 1988 and 2015), but nothing substantive has yet been yielded through such engagements.

The boundary disputes between India and China have their ultimate origin in the ‘Great Game’ played during the British Empire. At present, the two main areas of dispute along the Himalayan frontier are the western sector (Aksai Chin around 37,250 sq km/14,380 square miles) and the eastern sector (Arunachal Pradesh, around 83,740 sq km/32,330 sq mile). This article traces the roots of the boundary disputes between India and China and attempts to discuss sources of tensions and probable solutions.

The link to the whole paper can be found here [pdf].