Liberal Financial Markets in the Interest of Staatskredite – A Process-Tracing Study of the Link between Sovereign Debt Policy and the 1908 Bourse Law Reform in the German Empire

  • 1 University of Cologne, Cologne Center for Comparative Politics (CCCP), Herbert-Lewin-Straße 2, D-50931, Köln, Germany
Prof. Dr. Christine Trampusch
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  • University of Cologne, Cologne Center for Comparative Politics (CCCP), Herbert-Lewin-Straße 2, D-50931, Köln, Germany
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  • Christine Trampusch is a political scientist and Professor of International Comparative Political Economy and Economic Sociology at the Cologne Center for Comparative Politics (CCCP) at the University of Cologne. Her professorship is also Liaison Chair to the Max-Planck Institute for the Study of Societies (Brückenprofessur). Her current research projects cover the political economy of skill-formation regimes, of welfare states, of industrial relations as well as of financial market regulation and of public finance. Her research has been published in various international and national peer-reviewed journals and co-edited volumes have been published by Oxford University Press and Routledge.
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This study of the reform of the German Bourse Law in 1908 argues that the “self-undermining negative policy feedback effects” of the initial Bourse Law of 1896 on the market for Imperial and state bonds explain why exchange regulation was liberalized although the dominant political forces, the Conservatives and the Clericals, were opposed to bourses and capital markets. Based on an original assessment of primary documents, the study uses the method of explaining-outcome process tracing to show that the initial Bourse Law caused losses to the Imperial government and the large banks; this induced both actors to remove the prohibition of speculation. Because the German Empire can be viewed as a kind of laboratory for (first) treatment effects on financial market regulation of the sovereign debt market, this study contains lessons for understanding the relationship between states and financial markets in general.

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The Economic History Yearbook is a forum for scientific discussion about economic development, the logic of the market, as well as the social and cultural contexts of economic activity from the 16th century to the present. Geographically, it focuses on Europe and especially on Germany, emphasizing comparative perspectives.