Development and Underdevelopment in the History of Economic Thought

The transnationalization of business cycles research at the League of Nations

Trautwein Hans-Michael, University of Oldenburg

The notion of ‘transnationalization’ generally refers to economic, legal and social activities of non-state actors (firms, communities, NGOs, individuals) that dissolve traditional boundaries of nation states. Transnationalization is often set in contrast with ‘internationalization’ in the sense of intergovernmental policy coordination in inter- or supranational organizations. However, the history of the internationalization of governmental policies can also be understood as co-evolving with transnational activities. A case in point is the business-cycle research at the League of Nations in the years 1931-39. This was a process of transnationalization at three levels: (1) financial and logistic support from the Rockefeller Foundation, a mighty NGO from the United States, the key non-member state of the League, (2) the formation of an epistemic community across the borders of different cultures and national confines of business-cycle research, and (3) the exploration of the transnational linkages in the business fluctuations of the world economy, including the emergence of global depressions. While the key importance of support from the Rockefeller Foundation (level 1) is acknowledged, the focus in this paper is on the links between social context (level 2) and analytical content (level 3) of business cycle research at the League. Tracking this interaction through the three stages of the reports produced by Ohlin (1931), Haberler (1937) and Tinbergen (1939), it is shown that feedback procedures from the wider community helped to produce transnational business cycle theory – but to a large extent only in successive work of collaborators of the principal investigators. It is also discussed how the pre-war formation of this community of business-cycle researchers contributed to the post-war formation of researcher communities at the United Nations, and how this was linked to a surge of research in open economy macro, trade theory and development economics.

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Keywords: Business cycle theories, Transnationalization, League of Nations, research communities