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Marine Insurance in Britain and America, 1720–1844: A Comparative Institutional Analysis

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  • Kingston, Christopher

Abstract

This article examines how the marine insurance industry evolved in Britain and America during its critical formative period, focusing on the information asymmetries and agency problems that were inherent to the technology of overseas trade at the time, and on the path-dependent manner in which the institutions that addressed these problems evolved. I argue that the market was characterized by multiple equilibria because of a potential lemons problem. Exogenous shocks and endogenous institutional development combined to bring about a bifurcation of institutional structure, the effects of which persist to the present day.

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  • Kingston, Christopher, 2007. "Marine Insurance in Britain and America, 1720–1844: A Comparative Institutional Analysis," The Journal of Economic History, Cambridge University Press, vol. 67(2), pages 379-409, June.
    • Handle: RePEc:cup:jechis:v:67:y:2007:i:02:p:379-409_00
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    References listed on IDEAS

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    1. Kingston, Christopher & Caballero, Gonzalo, 2009. "Comparing theories of institutional change," Journal of Institutional Economics, Cambridge University Press, vol. 5(2), pages 151-180, August.
    2. Douglass C. North, 2005. "Introduction to Understanding the Process of Economic Change," Introductory Chapters, in: Understanding the Process of Economic Change, Princeton University Press.
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    5. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 63-80.
    6. Banner, Stuart, 1998. "The Origin of the New York Stock Exchange, 1791-1860," The Journal of Legal Studies, University of Chicago Press, vol. 27(1), pages 113-140, January.
    7. de Roover, Florence Edler, 1945. "Early Examples of Marine Insurance," The Journal of Economic History, Cambridge University Press, vol. 5(2), pages 172-200, November.
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    Cited by:

    1. Brousseau, Eric & Raynaud, Emmanuel, 2011. "“Climbing the hierarchical ladders of rules”: A life-cycle theory of institutional evolution," Journal of Economic Behavior & Organization, Elsevier, vol. 79(1), pages 65-79.
    2. Candela, Rosolino A. & Geloso, Vincent, 2019. "Why consider the lighthouse a public good?," International Review of Law and Economics, Elsevier, vol. 60(C).
    3. Brousseau, Eric & Garrouste, Pierre & Raynaud, Emmanuel, 2011. "Institutional changes: Alternative theories and consequences for institutional design," Journal of Economic Behavior & Organization, Elsevier, vol. 79(1-2), pages 3-19, June.
    4. Yang Hu & Les Oxley, 2017. "Exuberance in Historical Stock Prices during the Mississippi and South Seas Bubble Episodes," Working Papers in Economics 17/08, University of Waikato.
    5. Nejla Ellili & Haitham Nobanee & Ahmad Yuosef Alodat & Mehroz Nida Dilshad & Sabiha Nuzhat, 2024. "Mapping marine insurance: a bibliometric review: a taxonomical study using bibliometric visualization and systematic analysis," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 745-762, September.
    6. Wenge Zhu, 2024. "Market or clan: A comparative study of risk sharing institutional evolution in China and Europe," International Studies of Economics, John Wiley & Sons, vol. 19(2), pages 293-327, June.
    7. Shankaran Nambiar, 2021. "Capabilities and Communities: A Perspective from Institutional Economics," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(6), pages 1973-1996, December.
    8. Rosolino A. Candela & Vincent J. Geloso, 2020. "The Lighthouse Debate and the Dynamics of Interventionism," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(3), pages 289-314, September.
    9. Frehen, Rik G.P. & Goetzmann, William N. & Geert Rouwenhorst, K., 2013. "New evidence on the first financial bubble," Journal of Financial Economics, Elsevier, vol. 108(3), pages 585-607.
    10. Iodice Antonio, 2023. "Marine Insurance in Early Modern Genoa (1564–1571): A Risk-Shifting or Risk-Sharing Tool?," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 17(2), pages 215-231, July.
    11. Wallis, John Joseph, 2011. "Institutions, organizations, impersonality, and interests: The dynamics of institutions," Journal of Economic Behavior & Organization, Elsevier, vol. 79(1-2), pages 48-64, June.
    12. Rik P. & William Goetzmann & K. Rouwenhorst, 2009. "New Evidence on the First Financial Bubble," Yale School of Management Working Papers amz2542, Yale School of Management, revised 01 Nov 2009.
    13. Arjen van der Heide & Sebastian Kohl, 2024. "Private Insurance, Public Welfare, and Financial Markets: Alpine and Maritime Countries in Comparative-Historical Perspective," Politics & Society, , vol. 52(2), pages 268-303, June.
    14. Rosolino A. Candela & Vincent J. Geloso, 2018. "The lightship in economics," Public Choice, Springer, vol. 176(3), pages 479-506, September.
    15. Acheson, Graeme G. & Aldous, Michael & Quinn, William, 2022. "The anatomy of a bubble company: The London Assurance in 1720," QUCEH Working Paper Series 22-08, Queen's University Belfast, Queen's University Centre for Economic History.
    16. Graeme Acheson & Michael Aldous & William Quinn, 2024. "The anatomy of a bubble company: The London Assurance in 1720," Economic History Review, Economic History Society, vol. 77(1), pages 160-184, February.
    17. Mendonça, Sandro, 2013. "The “sailing ship effect”: Reassessing history as a source of insight on technical change," Research Policy, Elsevier, vol. 42(10), pages 1724-1738.

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