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Political instability and non-price loan terms in Lima, Peru: evidence from notarized contracts

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  • Luis FELIPE Zegarra

Abstract

This article analyzes the effects of political instability on the provision of credit in 1835–1865, paying special attention to non-price loan terms. By relying on a sample of more than 1,700 notarized records, the article shows that political instability had an important effect on the amount and length of loans. As Peru became politically more stable after the mid-1840s, private lenders made larger loans with longer maturities. Medium-term credit among approved loans was more frequent after political stabilization. Long-term credit, however, was not common during this period.

Suggested Citation

  • Luis FELIPE Zegarra, 2016. "Political instability and non-price loan terms in Lima, Peru: evidence from notarized contracts," European Review of Economic History, European Historical Economics Society, vol. 20(4), pages 478-525.
    • Handle: RePEc:oup:ereveh:v:20:y:2016:i:4:p:478-525.
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    File URL: http://hdl.handle.net/10.1093/ereh/hew012
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    References listed on IDEAS

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    1. Suk Hun Lee, 1993. "Relative Importance of Political Instability and Economic Variables on Perceived Country Creditworthiness," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(4), pages 801-812, December.
    2. Kee‐Hong Bae & Vidhan K. Goyal, 2009. "Creditor Rights, Enforcement, and Bank Loans," Journal of Finance, American Finance Association, vol. 64(2), pages 823-860, April.
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    5. Koskela, Erkki, 1983. "Credit rationing and non-price loan terms : A re-examination," Journal of Banking & Finance, Elsevier, vol. 7(3), pages 405-416, September.
    6. Vizcarra, Catalina, 2009. "Guano, Credible Commitments, and Sovereign Debt Repayment in Nineteenth-Century Peru," The Journal of Economic History, Cambridge University Press, vol. 69(2), pages 358-387, June.
    7. Venieris, Yiannis P & Gupta, Dipak K, 1986. "Income Distribution and Sociopolitical Instability as Determinants of Savings: A Cross-sectional Model," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 873-883, August.
    8. Haber, Stephen & Maurer, Noel & Razo, Armando, 2003. "When the Law Does Not Matter: The Rise and Decline of the Mexican Oil Industry," The Journal of Economic History, Cambridge University Press, vol. 63(1), pages 1-32, March.
    9. Luis Felipe Zegarra, 2015. "Political Instability, Institutions and Private Capital Markets in Lima, Peru," Working Papers 39, Peruvian Economic Association.
    10. Zegarra, Luis Felipe, 2017. "Private Lenders, Banks And Mortgage Credit In Peru. Evidence From Notarised Loans," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 35(1), pages 105-146, March.
    11. Haber, Stephen H., 1991. "Industrial Concentration and the Capital Markets: A Comparative Study of Brazil, Mexico, and the United States, 1830–1930," The Journal of Economic History, Cambridge University Press, vol. 51(3), pages 559-580, September.
    12. Kent, Richard J, 1980. "Credit Rationing and the Home Mortgage Market," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(3), pages 488-501, August.
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    Cited by:

    1. Yolanda Blasco Martel & María Guadalupe Noriega Caldera, 2019. "Regulación y emergencia de los sistemas bancarios: Las experiencias de Espana y Latinoamérica en perspectiva histórica, 1820-1870," Tiempo y Economía, Universidad de Bogotá Jorge Tadeo Lozano, vol. 6(1), pages 161-189, February.

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    More about this item

    Keywords

    N2; N26; N46; K1;
    All these keywords.

    JEL classification:

    • N2 - Economic History - - Financial Markets and Institutions
    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
    • N46 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Latin America; Caribbean
    • K1 - Law and Economics - - Basic Areas of Law

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