From a common empire to colonial rule: Commodity market disintegration in the Near East

Abstract

This paper investigates the impact of the disruption of the Ottoman Empire on the integration of regional and colonial commodity markets in the Near East. Exploiting a novel dataset on commodity prices in Syria, Egypt, Turkey, France, and the United Kingdom covering the 1787–1939 period, it assesses the extent of price dispersion across markets before and after the end of the Ottoman Empire and investigates the causes behind the change in market integration. The results indicate that, while regional markets disintegrated during 1923–39, reflecting the anti‐global environment of the interwar era, colonial market linkages strengthened. The empirical findings also highlight that border effects, rather the rise of protection per se, were the main drivers behind the increase of regional price dispersion.