Eoin McLaughlin

GENUINE SAVINGS AND SUSTAINABILITY

Genuine Savings (GS) has emerged as the leading economic indicator of sustainable economic development at the country level. It derives from the literatures on weak sustainability, wealth accounting and national income accounting. We discuss the theoretical underpinnings of GS, focusing on the relationship between changes in a nations extended capital stock and the future path of consumption. The indicator has entered widespread use propelled by the World Banks publications, despite its varying performance as a predictor for future consumption. Notwithstanding the extensive body of literature reviewed, promising future research avenues are identified.

Counting carbon: historic emissions from fossil fuels, long-run measures of sustainable development and carbon debt

This article examines how to account for the welfare effects of carbon dioxide emissions, using the historical experiences of Britain and the USA from the onset of the industrial revolution to the present. While a single country might isolate itself from the detrimental effects of global warming in the short run, in the long all countries are unable to free ride. Thus, we support the use of a single global price for carbon dioxide emissions. The calculated price should decrease as we move back in time to take into account that carbon dioxide is a stock pollutant, and that one unit added to the present large stock is likely to cause more damage than a unit emitted under the lower concentration levels in the past. We incorporate the annual costs of British and US carbon emissions into genuine savings, and calculate the accumulated costs of their carbon dioxide emissions. Enlarging the scope and calculating the cumulative cost of carbon dioxide from the four largest emitters gives new insights into the question of who is responsible for climate change.

‘Profligacy in the encouragement of thrift’: Savings banks in Ireland, 1817–1914

This paper studies institutional changes in Irish savings banks and their functionality from 1817 to 1914. These changes saw market incumbents, trustee savings banks, suffering from a loss of confidence and displaced by a functionally equivalent but institutionally distinct competitor, the Post Office Savings Bank. The paper finds that, despite significant institutional change, savings banks of all types were consistently loss-making. This suggests that Irish savings banks were subsidised. In addition, despite contemporary accusations of credit shortages, Irish savings banks, due to legal restrictions, did not engage in any private sector lending, thus arguably crowding out private investment.

Raiffeisenism Abroad: Why Did German Cooperative Banking Fail in Ireland But Prosper in the Netherlands?

type=main> Why did imitations of Raiffeisens rural cooperative savings and loans associations work well in some European countries, but fail in others? This article considers the example of Raiffeisenism in Ireland and in the Netherlands. Raiffeisen banks arrived in both places at the same time, but had drastically different fates. In Ireland they were almost wiped out by the early 1920s, while in the Netherlands they proved to be a long-lasting institutional transplant. Raiffeisen banks were successful in the Netherlands because they operated in niche markets with few competitors, while rural financial markets in Ireland were unsegmented and populated by long-established incumbents, leaving little room for new players, whatever their institutional advantages. Dutch Raiffeisen banks were largely self-financing, closely integrated into the wider rural economy, and able to take advantage of economic and religious divisions in rural society. Their Irish counterparts were not.

An experiment in banking the poor: the Irish Mont-de-Piété, c. 1830–1850

Continental pawnbroking institutions, Monts-de-PiA©tA©, were introduced in Ireland in the 1830s and 1840s but did not establish a permanent status. Irish social reformers believed that a Mont-de-PiA©tA© system would reduce the cost of borrowing for the poor and also fund a social welfare network, thus negating the need for an Irish Poor Law. This article explores the introduction of the Mont-de-PiA©tA© charitable pawnbroker in Ireland and outlines some reasons for its failure. It uses the market incumbents, private pawnbrokers, as a base group in a comparative study and asks why the Monts-de-PiA©tA© were the unsuccessful ones of the two. The article finds that the public nature and monopoly status of Monts-de-PiA©tA© on the Continent realised economies of scale and gave preferential interest rates on capital, as well as enabling the Mont-de-PiA©tA© loan book to be cross-subsidised. These conditions were not replicated in Ireland, hence the failure of the Monts-de-PiA©tA© there.

A Note on Mutual Savings and Loan Societies in Nineteenth-Century Ireland

Mutual savings and loan societies played an important role in social and economic life in nineteenth-century Ireland yet, to date, they have been overlooked by economic historians of the island. This article addresses this lacuna by providing an overview of the history of Friendly Society Loan Funds (FSLFs) and Building Societies. It finds that there were a variety of savings strategies in urban Ireland and concludes that the economic function of these mutual institutions sheds light on other aspects of Irish history, such as Loan Fund Societies (LFSs), savings banks and cooperative banks.

Women of an uncertain age: quantifying human capital accumulation in rural Ireland in the nineteenth century

Geary and Stark find that Ireland’s Post-Famine per capita GDP converged with British levels, and that this convergence was due to TFP growth rather than mass emigration. We devise new long-run measurements of human capital accumulation in Ireland in order to facilitate an assessment of sources of this TFP growth, including the relative contribution of men and women. We do so by exploiting the frequency at which age data heap at round ages, a measure that has been widely interpreted as an indicator of a population’s basic numeracy skills. Because Foldvari, Van Leeuwen and Van Leeuwen-Li find that gender-specific trends in this measure derived from census returns are biased by who is reporting and recording the age information, we correct any computed numeracy trends using data from prison and workhouse registers, sources in which women self-reported their age. We find that rural Irish women born early in the nineteenth century had substantially lower levels of human capital than uncorrected census data would otherwise suggest. Our results are large in magnitude and economically significant. The speed at which women converged is consistent with Geary and Stark’s interpretation of Irish economic history; Ireland likely graduated to Europe’s club of advanced economies thanks in part to rapid advances in female human capital

Substituting Freshwater: Can Ocean Desalination and Water Recycling Capacities Substitute for Groundwater Depletion in California?

While the sustainability of resource depletion is a longstanding environmental concern, wider attention has recently been given to growing water scarcity and groundwater depletion. This study seeks to test the substitutability assumption embedded in weak sustainability indicators using a case study of Californian water supply. The volume of groundwater depletion is used as a proxy for unsustainable water consumption, and defined by synthesising existing research estimates into low, medium and high depletion baselines. These are compared against projected water supply increases from ocean desalination and water recycling by 2035, to determine whether new, drought-proof water sources can substitute for currently unsustainable groundwater consumption. Results show that the maximum projected supply of new water, 2.47 million acre-feet per year (MAF/yr), is sufficient to meet low depletion estimates of 2.02xa0MAF/yr, but fails to come near the high depletion estimate of 3.44xa0MAF/yr. This does not necessarily indicate physical limitations of substitutability, but more so socio-economic limitations influenced by high comparative costs. By including capacities in demand-substitutability via urban water conservation, maximum predicted capacities reach 5.57xa0MAF/yr, indicating wide room for substitution. Based on these results, investment in social and institutional capital is an important factor to enhance demand-side substitutability of water and other natural resources, which has been somewhat neglected by the literature on the substitutability of natural resources.

Accounting for Sustainable Development over the Long-Run:Lessons from Germany

Abstract We construct long-run sustainability indicators based on changes in Comprehensive Wealth - which we refer to as Genuine Savings (GS) - for Germany over the period 1850-2000. We find that German sustainability indicators are positive for the most part, although they are negative during and after the two World Wars and also the Great Depression. We also test the relationship between these wealth changes and a number of measures of well-being over the long-run: changes in consumption as well as changes in average height and infant mortality rates. We find a positive relationship between GS and our well-being indicators over different time horizons, however, the relationship breaks down during WWII. We also test if the GS/Comprehensive Wealth framework is able to cope with massive disinvestment at the end of the Second World War due to war-related destructions and dismantlement. We find that negative rates of GS were by and large avoided due to the accumulation of technology and growth-friendly institutions. We demonstrate the importance of broader measures of capital, including measures of technological progress, and its role in the process of economic development; and the limits of conventional measures of investment to understand why future German consumption did not collapse.

Capitalising on the Irish land question: land reform and state banking in Ireland, 1891–1938

Land reform and its financial arrangements are central elements of modern Irish history. Yet to date, the financial mechanisms underpinning Irish land reform have been overlooked. The paper outlines the mechanisms of land reform in Ireland and the importance of land bonds to the process. The paper introduces a new database on Irish land bonds listed on the Dublin Stock Exchange from 1891 to 1938. It illustrates the nature of these b onds and presents data on their size, liquidity and market returns. The paper finds a high level of state banking in Ireland: large issues of land bonds were held by state owned savings banks.