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Contracts and cooperation: The relative failure of the Irish dairy industry in the late nineteenth century reconsidered

Author

Listed:
  • Henriksen, Ingrid

    (University of Southern Denmark)

  • McLaughlin, Eoin

    (University of St. Andrews)

  • Sharp, Paul

    (University of Southern Denmark & CAGE)

Abstract

Why did the establishment of cooperative creameries in late nineteenth century Ireland fail to halt the relative decline of her dairy industry compared to other emerging producers? This paper compares the Irish experience with that of the market leader, Denmark, and shows how each adopted the cooperative organisational form, but highlights that an important difference was institutional: specifically regarding the enforcement of vertically binding contracts, which are considered to be of vital importance for the successful operation of cooperatives. We argue that this failure, combined with a strong proprietary sector which was opposed to cooperation, reinforced the already difficult conditions for dairying in Ireland due to poor social capital.

Suggested Citation

  • Henriksen, Ingrid & McLaughlin, Eoin & Sharp, Paul, 2015. "Contracts and cooperation: The relative failure of the Irish dairy industry in the late nineteenth century reconsidered," CAGE Online Working Paper Series 216, Competitive Advantage in the Global Economy (CAGE).
  • Handle: RePEc:cge:wacage:216
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    File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/216-2015_sharp.pdf
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    References listed on IDEAS

    as
    1. Guinnane, Timothy W. & Martinez-Rodriguez, Susana, 2010. "Did the Cooperative Start Life as a Joint-Stock Company? Business Law and Cooperatives in Spain, 1869-1931," Center Discussion Papers 90880, Yale University, Economic Growth Center.
    2. Guinnane, Timothy & Harris, Ron & Lamoreaux, Naomi R. & Rosenthal, Jean-Laurent, 2007. "Putting the Corporation in its Place," Enterprise & Society, Cambridge University Press, vol. 8(03), pages 687-729, September.
    3. Henriksen, Ingrid & Lampe, Markus & Sharp, Paul, 2011. "The role of technology and institutions for growth: Danish creameries in the late nineteenth century," European Review of Economic History, Cambridge University Press, vol. 15(03), pages 475-493, December.
    4. Graeme G. Acheson & Gareth Campbell & John D. Turner & Nadia Vanteeva, 2015. "Corporate ownership and control in Victorian Britain," Economic History Review, Economic History Society, vol. 68(3), pages 911-936, August.
    5. Joel Sobel, 2002. "Can We Trust Social Capital?," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 139-154, March.
    6. Ingrid Henriksen & Eoin McLaughlin & Paul Sharp, 2015. "Contracts and cooperation: the relative failure of the Irish dairy industry in the late nineteenth century reconsidered," European Review of Economic History, Oxford University Press, vol. 19(4), pages 412-431.
    7. Richard Perren, 1971. "The North American Beef and Cattle Trade with Great Britain, 1870-1914," Economic History Review, Economic History Society, vol. 24(3), pages 430-444, August.
    8. Francisco J. Beltrán Tapia, 2012. "Commons, social capital, and the emergence of agricultural cooperatives in early twentieth century Spain," European Review of Economic History, Oxford University Press, vol. 16(4), pages 511-528, November.
    9. Henriksen, Ingrid, 1999. "Avoiding lock-in: Cooperative creameries in Denmark, 1882 1903," European Review of Economic History, Cambridge University Press, vol. 3(01), pages 57-78, April.
    10. KevinH. O'Rourke, 2007. "Culture, Conflict and Cooperation: Irish Dairying Before the Great War," Economic Journal, Royal Economic Society, vol. 117(523), pages 1357-1379, October.
    11. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
    12. Eoin McLaughlin & Paul Sharp, 2015. "Competition between organisational forms in Danish and Irish dairying around the turn of the twentieth century," Discussion Papers in Environment and Development Economics 2015-16, University of St. Andrews, School of Geography and Sustainable Development.
    13. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
    14. Posner, Richard A., 2010. "From the new institutional economics to organization economics: with applications to corporate governance, government agencies, and legal institutions," Journal of Institutional Economics, Cambridge University Press, vol. 6(01), pages 1-37, March.
    15. Henriksen, Ingrid & Hviid, Morten & Sharp, Paul, 2012. "Law and Peace: Contracts and the Success of the Danish Dairy Cooperatives," The Journal of Economic History, Cambridge University Press, vol. 72(01), pages 197-224, March.
    16. O'Rourke, Kevin H., 2007. "Property rights, politics and innovation: creamery diffusion in pre-1914 Ireland," European Review of Economic History, Cambridge University Press, vol. 11(03), pages 395-417, December.
    17. repec:cge:wacage:2016 is not listed on IDEAS
    18. David Taylor, 1976. "The English Dairy Industry, 1860–1930," Economic History Review, Economic History Society, vol. 29(4), pages 585-601, November.
    19. Christopher L. Colvin & Eoin McLaughlin, 2014. "Raiffeisenism abroad: why did German cooperative banking fail in Ireland but prosper in the Netherlands?," Economic History Review, Economic History Society, vol. 67(2), pages 492-516, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Ingrid Henriksen & Eoin McLaughlin & Paul Sharp, 2015. "Contracts and cooperation: the relative failure of the Irish dairy industry in the late nineteenth century reconsidered," European Review of Economic History, Oxford University Press, vol. 19(4), pages 412-431.
    2. repec:seh:journl:y:2017:i:73:m:december:p:91-118 is not listed on IDEAS
    3. Peter Sandholt Jensen & Markus Lampe & Paul Sharp & Christian Volmar Skovsgaard, 2018. "‘Getting to Denmark’: the Role of Elites for Development," Working Papers 0125, European Historical Economics Society (EHES).
    4. Markus Lampe & Paul Sharp, 2017. "ÔRationalÕ Farmers and the Emergence of Modern Accounting in Danish Dairying," Working Papers 0115, European Historical Economics Society (EHES).
    5. Colvin, Christopher L. & Henderson, Stuart & Turner, John D., 2018. "The origins of the (cooperative) species: Raiffeisen banking in the Netherlands, 1898-1909," QUCEH Working Paper Series 2018-03, Queen's University Belfast, Queen's University Centre for Economic History.
    6. Colvin, Christopher L. & Henderson, Stuart & Turner, John D., 2018. "The origins of the (cooperative) species: Raiffeisen banking in the Netherlands, 1898-1909," QUCEH Working Paper Series 2018-03, Queen's University Belfast, Queen's University Centre for Economic History.
    7. Eoin McLaughlin & Paul Sharp, 2015. "Competition between organisational forms in Danish and Irish dairying around the turn of the twentieth century," Discussion Papers in Environment and Development Economics 2015-16, University of St. Andrews, School of Geography and Sustainable Development.

    More about this item

    Keywords

    Contracts; cooperation; dairying; Ireland;

    JEL classification:

    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913
    • N53 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: Pre-1913
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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