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

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  • Christopher Kingston

    (Amherst College)

Abstract

"By the mid nineteenth century, the British marine insurance market was dominated by Lloyd’s of London, a marketplace in which voyages were underwritten by private individuals. In contrast, marine insurance in other countries, including the United States, was carried out mainly by joint-stock corporations. This paper examines the historical evolu- tion of the marine insurance industry in Britain and America during its critical formative period, focusing on the information and agency problems which were inherent to the technology of overseas trade at the time, and on the path-dependent manner in which the institutions which addressed these problems evolved. We argue that the market was characterized by multiple equilibria because of a potential lemons problem. The regulatory environment produced by Britain’s Bubble Act, and exogenous shocks including American Independence and the Napoleonic wars, combined to bring about a bifurcation of institutional structure, the effects of which persist to the present day."

Suggested Citation

  • Christopher Kingston, 2005. "Marine Insurance in Britain and America, 1720-1844: A Comparative Institutional Analysis," Working Papers 5025, Economic History Society.
    • Handle: RePEc:ehs:wpaper:5025
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    References listed on IDEAS

    as
    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.
    3. Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 629-649.
    4. Douglass North, 1960. "The United States Balance of Payments, 1790-1860," NBER Chapters, in: Trends in the American Economy in the Nineteenth Century, pages 573-628, National Bureau of Economic Research, Inc.
    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. 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.
    2. 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.

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    • N00 - Economic History - - General - - - General

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