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  • Cited by 2
  • Cited by
    This chapter has been cited by the following publications. This list is generated based on data provided by CrossRef.

    Vitola, Alise and Senfelde, Maija 2015. The role of institutions in economic performance. Verslas: Teorija ir Praktika, Vol. 16, Issue. 3, p. 271.

    Hannah, Les 2014. Corporations in the US and Europe 1790–1860. Business History, Vol. 56, Issue. 6, p. 865.

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  • Print publication year: 2010
  • Online publication date: August 2012

3 - State and private institutions

Summary

Economic growth depends upon institutions (rules that constrain human behavior and their enforcement mechanisms: North, 1981; Greif, 2006). Some of these rules arise by means of a public process, while others are privately adopted; some are explicit (written down as laws or contracts) and others implicit. Their enforcement can rely on public coercion, private third parties, or even reputation. We focus here on those institutions that are formal and publicly enforced. This is not because informal institutions waned with modernization, but rather because the formal institutions were the ones that underwent the most dramatic transformation during the period we are considering. Many polities adopted written constitutions and formal legislative organizations, and recast their laws. Even Britain, where no formal constitution was set down, saw electoral reform and an explosion of legislative activity.

Economic historians have long emphasized the role of institutions in ensuring prosperity; after a hiatus, development economics has come to similar conclusions (see, e.g., Acemoglu et al., 2001; Engerman and Sokoloff, 1997; Banerjee and Iyer, 2005). Scholars have particularly highlighted the benefits of secure property rights. In this light, England's early economic leadership sprang from the Glorious Revolution's institutional settlement (North and Weingast, 1989). The great variety of political and economic, public and private institutions that prevailed in Europe offers tempting ground for testing this largely inductive argument based on Britain. Although the variation in institutions is extensive, and well documented in the archival record, it raises its own problems: institutions, archaic or modern, are chosen.

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The Cambridge Economic History of Modern Europe
  • Online ISBN: 9780511794834
  • Book DOI: https://doi.org/10.1017/CBO9780511794834
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