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Property Rights Under Administrator-Dictators: The Rise and Fall of America's First Bank

Published online by Cambridge University Press:  15 November 2013

Dror Goldberg  and
Igal Milchtaich
Dror Goldberg
Affiliation:
Lecturer, Department of Economics, Bar-Ilan University, Ramat Gan 5290002, Israel. E-mail: dg@drorgoldberg.com.
Igal Milchtaich
Affiliation:
Associate Professor, Department of Economics, Bar-Ilan University, Ramat Gan 5290002, Israel. E-mail: Igal.Milchtaich@biu.ac.il.
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Abstract

The dictatorial Dominion of New England (1686–1689) saw the rise and fall of the first operational bank scheme in America. Both events resulted from the appointed rulers' attempts to personally profit from real estate, subject to an absolutist constitution imposed by England. The first, local ruler led a nominally private land bank. The subsequent, foreign ruler invalidated all land titles and thus killed the bank. This unusual case study exemplifies an extension of Mancur Olson's model of stationary and roving bandits, and demonstrates how economic development can be affected in different ways by different types of dictators.

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Type
Articles
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The Journal of Economic History , Volume 73 , Issue 4 , December 2013 , pp. 1105 - 1131
Copyright
Copyright © The Economic History Association 2013 

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Footnotes

For suggestions and discussions, we thank John Hanson, Arye Hillman, Avner Greif, Richard Johnson, Larry Neal, Gary Richardson, Peter Rousseau, Richard Sylla, anonymous referees, Editor Paul Rhode, participants at university seminars (Bar-Ilan, Haifa, Hebrew, NYU, Purdue) and participants at conferences (BHC, ISNIE, Israel Economic Association, SSHA, “Questioning Credible Commitment” at Cambridge).

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