During the last millennium the economies of the world have produced more wealth, and became more interconnected. These transformations have changed the lives of almost every person on the planet, as well as the societies they make up together. At the same time, change has affected these societies and individuals in a variety of ways, and prosperity for some has been accompanied by misery for others. Global growth and global inequality are the two core issues for the research undertaken by the Centre for Global Economic History.
Current research programme
Economic history’s core question concerns the wealth and poverty of nations. How has the world economy managed to grow over the centuries? And why, at the same time, did some countries profit more than others from this growth? The answer to the question why this has happened, has to be preceded by knowledge about what exactly has happened: when did ‘the Great Divergence’ occur, and how did the process of global inequality gradually evolve? Raising such questions implies that we all agree about the definition of ‘development’: but is it GDP per capita growth, or a much more complex phenomenon, as suggested by Amartya Sen’s ‘development as freedom’? Getting the facts and the concepts right is a good starting point for answering the question why this happened. Why were certain parts of the world relatively successful in generating growth and development? Was this a sudden ‘miracle’ – the result perhaps of fortuitous circumstances – or was it deeply rooted in the institutions and development paths of (for example) Western Europe. Why was China, arguably the most advanced economy some thousand years ago, initially unable to develop into a modern industrial society? And why are certain parts of the world – sub-Saharan Africa – even more than 200 years after the beginning of the process of ‘modern economic growth’ in the West, still (or again) so poor? What role does climate and geography play in these stories – or is the ‘Reversal of Fortune’ the result of the long-term effects of institutions?
These are some of the big debates in the field of global economic history. To answer them we need a deep understanding of the development paths of different parts of the world, of their institutions, their interactions through world markets, their geography and perhaps even their religion and culture. The Netherlands – or rather the Low Countries – have emerged as one of the more interesting case studies for global economic history, because of their role during the early development of the capitalist world economy, and their involvement in the development of non-European regions, especially in Latin America and South-East Asia. An important dimension of the research carried out by the Centre for Global Economic History is therefore focused on understanding and analyzing the long-term evolution of the economy and society of the Low Countries and its non-European colonies in a comparative perspective. This ranges from analyses of the genesis of a market economy in the western part of the Netherlands in the Middle Ages, via research into the financial markets of early modern Low Countries, to a comparative study of the changes in the Dutch business system in the 20th century, and the development of the Indonesian economy in the 19th and 20th centuries. The complex relationships between institutions and economic growth inform much of this work. Around these core research questions, separate projects focus on related issues, such as citizenship and ‘bottom-up’ institutions like guilds, beguignages, and water-boards.
The development of the Low Countries in the very long term is put into broad perspective via the analysis of much broader processes that took place on a European scale: how did institutions around marriage and the household, for example, interact with human capital formation and economic change? Can we identify systematic explanations for the ‘cyclical’ development of core regions of the world economy – such as Iraq in the 8th-10th centuries, Italy in the 13th-15th centuries, and the Low Countries in the 15th-18th centuries? What was the role played by various ‘institutions of collective action’, bottom-up institutions set up to promote the economic and socio-political interests of their members which formed the core of European civil society (such as guilds and commons)? What drove the process of urbanization in Western Europe from the disintegration of the Roman Empire to the present, in comparison with other urban systems, such as the one centred in the Middle East?
With such questions in mind, the Centre also carries out a number of projects that focus on non-European regions or on the world as a whole. Work on the Indonesian economy is a direct off-shoot of the Dutch colonial legacy: many of the sources are preserved in Dutch archives. What are the root causes of African underdevelopment – and how are they linked to a history of slavery and ‘extractive institutions’? The growth of human capital in the world economy in the past two centuries is subject of another large project. Linked to this, the hypothesis by Amartya Sen that ‘agency’ is key to economic development, and that in return, economic development leads to more ‘agency’, is tested and refined for the world economy in the period 1800-2000. This is also related to a reconsideration of the definition and measure of ‘development’ – should we focus on growth of GDP, or is ‘freedom’ (as argued by Sen) the true standard for this?
To address these huge issues, we rely on theories from the social sciences – from economics in particular. Our mission is interdisciplinary: we combine the toolkit of the historian with the theories and methods as developed in the social sciences. Part of this toolkit is a deep knowledge of historical sources, allowing us to quantify key variables that are central to theories from the social sciences. Quantification to systematically test these insights is a key strategy in the work carried out by the Centre. It is also one of the homes of the research project Clio Infra, which aims to collect and standardize economic and socio-political development of the world economy in the past 500 years.