Financial Development and Sectoral Output Growth in 19th Century Germany

5 Conclusions

rotation-systems from being introduced and blocked the privatization of common land. Also
agricultural price ceiling, prior to 1850, contributed to investment being relatively unprofitable
in the beginning of the century. Starting from a low base, agriculture might therefore been
able to benefit more strongly from the bank lending than other sectors in the economy.

Firm level data, if available, and individual case studies would help a lot to strengthen
the case that today’s industrialized countries experienced a similar start up phase in their
development process as today’s emerging markets. Several such case studies and a large body
of literature on the institutional development of the German banking system already exist and
are surveyed for instance in Guinnane (2002). Particularly interesting from our perspective
are the origins of German credit cooperatives in the 1840’s and 1850’s, who, next to financing
small businesses and corporations, also engaged directly in purchasing agricultural inputs and
the marketing of agricultural products.²⁰ Also, Edwards and Fischer (1994) and Edwards and
Nibler (2000) documented the development of the banking system in Germany. Continuing
to set together these pieces of information is a challenging, but worthwhile exercise for both,
researchers in economic history and in development finance.

²⁰See also Guinnane (2001).

19

<<   18   19   20   21   22   23   24   >>

More intriguing information