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Contract enforcement in Uruguay during the First Globalization: a methodological proposal and some comparisons

ISSNISSN/ISBN: 1688-8561
ISSNYear: 2015
EditorialEditorial: Revista Uruguaya de Historia Económica, vol. V (7)
Nº of PagesNº of Pages: 65-80

Economic history, as well as current growth and development theory, recognises that institutions matters to explain the long run economic development. However, how to  measure the process is a controversial issue and it prompts a vigorous discussion. The aim of this article is to estimate one of the institutional quality indicators proposed by the literature, the "contract-intensive money” (CIM), for Uruguay during the First Globalization (1870-1913). Actually, this is an indirect measure of the contract enforcement and we evaluate its reliability running two exercises. On the one hand, we consider how representative the trajectory of the indicator in Uruguay is during the First Globalization in a historical perspective. On the other hand, we compare the Uruguayan CIM evolution with other settler economies and other institutional quality indicators. We conclude that CIM is an adequate indicator of institutional quality, in terms of enforcement of contracts, with the advantage of its simplicity on the construction for long-run periods and results useful to offer an overview of the institutional evolution.

 
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