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Overcoming the Egyptian cotton crisis in the interwar period: the role of irrigation, drainage, new seeds, and access to credit

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  • Laura Panza
  • Ulaş Karakoç

Abstract

After experiencing a period of spectacular growth during the late nineteenth century, the Egyptian cotton sector underwent a phase of stagnation, which was followed by a gradual and steady increase in output during the interwar period. Drawing on a new panel dataset at the province–year level, this article explores the determinants of the upturn in cotton output, running a horserace between credit, seed technology, and infrastructure. In order to address endogeneity concerns, an instrumental variable approach is adopted, using a modified version of Bartik's shift‐share instrumental variable. Our results provide supporting evidence that peasants switched to a lower‐yielding cotton variety as a response to changes in relative price. Moreover, our production function estimates show that two key factors had a positive impact on output growth: credit availability and the adoption of new cotton varieties.

Suggested Citation

  • Laura Panza & Ulaş Karakoç, 2021. "Overcoming the Egyptian cotton crisis in the interwar period: the role of irrigation, drainage, new seeds, and access to credit," Economic History Review, Economic History Society, vol. 74(1), pages 60-86, February.
    • Handle: RePEc:bla:ehsrev:v:74:y:2021:i:1:p:60-86
    DOI: 10.1111/ehr.13022
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    References listed on IDEAS

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