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The Trade Impact of the Zollverein

  • Keller, Wolfgang
  • Shiue, Carol Hua

The Zollverein was arguably the most important free-trade agreement of the 19th century. This paper investigates the economic impact of the Zollverein on trade in Germany. Although 1834 is the official date of the Zollverein's establishment, member states in fact joined in a non-random sequence over several decades. This was because the benefits of becoming a member increased, both as the size of the union increased, and as membership in the union became increasingly important for accessing foreign markets. Our key innovation in this paper is to incorporate the endogenous effects of accession into an estimate of the economic impact of the Zollverein customs union. We find these effects are important--our estimated effects are several times larger than the simpler estimates that do not take these effects into account. The paper discusses the implications of this for Germany's economic history as well as for other studies of trade liberalization.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9387.

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Date of creation: Mar 2013
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Handle: RePEc:cpr:ceprdp:9387
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  1. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March.
  2. Federico, Giovanni & Tena, Antonio, 1998. "Was Italy a protectionist country?," European Review of Economic History, Cambridge University Press, vol. 2(01), pages 73-97, April.
  3. Florian Ploeckl, 2015. "The Zollverein and the Formation of a Customs Union," School of Economics Working Papers 2015-08, University of Adelaide, School of Economics.
  4. Federico, Giovanni, 2011. "When did European markets integrate?," European Review of Economic History, Cambridge University Press, vol. 15(01), pages 93-126, April.
  5. Becker, Sascha O. & Wößmann, Ludger, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," Munich Reprints in Economics 20255, University of Munich, Department of Economics.
  6. Florian Ploeckl, 2010. "Borders, market access and urban growth; the case of Saxon towns and the Zollverein," Working Papers 2010/42, Institut d'Economia de Barcelona (IEB).
  7. Shiue, Carol H., 2005. "From political fragmentation towards a customs union: Border effects of the German Zollverein, 1815 to 1855," European Review of Economic History, Cambridge University Press, vol. 9(02), pages 129-162, August.
  8. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
  9. Acemoglu, Daron & Cantoni, Davide & Johnson, Simon & Robinson, James A, 2009. "The Consequences of Radical Reform: The French Revolution," CEPR Discussion Papers 7245, C.E.P.R. Discussion Papers.
  10. Ploeckl, Florian, 2013. "The internal impact of a customs union; Baden and the Zollverein," Explorations in Economic History, Elsevier, vol. 50(3), pages 387-404.
  11. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  12. Keller, Wolfgang & Shiue, Carol Hua, 2004. "Markets in China and Europe on the Eve of the Industrial Revolution," CEPR Discussion Papers 4420, C.E.P.R. Discussion Papers.
  13. Kopsidis Michael, 2002. "The Creation of a Westphalian Rye Market 1820-1870: Leading and Following Regions, a Co-Integration Analysis," Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, De Gruyter, vol. 43(2), pages 85-112, December.
  14. Heinemeyer, Hans Christian & Schulze, Max Stephan & Wolf, Nikolaus, 2008. "Endogenous Borders? Exploring a Natural Experiment on Border Effects," CEPR Discussion Papers 6909, C.E.P.R. Discussion Papers.
  15. Dave Donaldson, 2010. "Railroads of the Raj: estimating the impact of transportation infrastructure," LSE Research Online Documents on Economics 38368, London School of Economics and Political Science, LSE Library.
  16. Wolf, Nikolaus & Ritschl, Albrecht, 2003. "Endogeneity of Currency Areas and Trade Blocs: Evidence from the Inter-War Period," Papers 2004,10, Humboldt-Universität Berlin, Center for Applied Statistics and Economics (CASE).
  17. Martin Uebele, 2010. "Demand Matters: German Wheat Market Integration 1806-1855 in a European Context," CQE Working Papers 1110, Center for Quantitative Economics (CQE), University of Muenster.
  18. Jacks, David S., 2006. "What drove 19th century commodity market integration?," Explorations in Economic History, Elsevier, vol. 43(3), pages 383-412, July.
  19. Dave Donaldson, 2010. "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure," NBER Working Papers 16487, National Bureau of Economic Research, Inc.
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