Complementarity, Competition and Institutional Development: The Irish Loan Funds through Three Centuries
AbstractIreland's loan funds were a long lived, self-sustaining, large-scale microcredit organization that made millions of loans, without collateral, to the poor. We examine the life-cycle of this institution and show how the loan funds responded to their economic environment in ways that benefitted Ireland but diminished the demand for the funds' services. During their first 100 years, a period of growth ending in the 1840s, they adapted constantly to reflect their changing environment, and were successful in obtaining improvements to their legal structure because they were complementary to the banking system and were seen as an effective method of relieving poverty. In contrast, in their second hundred years, they became ossified, perhaps because the commercial banks had become direct competitors. We see in their progress through 200 years an example of Douglass North's contention that institutions change incrementally and, when they are successful, often change the framework within which they operate.
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Bibliographic InfoPaper provided by EconWPA in its series Economic History with number 9704003.
Length: 32 pages
Date of creation: 15 Apr 1997
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Find related papers by JEL classification:
- N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
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"Microcredit in Prefamine Ireland,"
Explorations in Economic History,
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- Hollis, Aidan & Sweetman, Arthur, 1998. "Microcredit: What can we learn from the past?," World Development, Elsevier, vol. 26(10), pages 1875-1891, October.
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