Credible commitment in early modern Europe : north and Weingast revisited.
Journal of law, economics, and organization, 18
This paper proposes a revision to existing arguments that institutions of limited government (characterized by multiple veto points) improve the ability of governments to credibly commit. Focusing on the issue of sovereign indebtedness, I present a simple framework for analyzing credibility problems in an economy divided between owners of land and owners of capital. I then argue that establishing multiple veto points can improve credibility, but whether this takes place depends upon the structure of partisan interests in a society, on the existence of cross-issue coalitions, and on the extent to which management of government debt is delegated. I develop several propositions to take account of these factors and evaluate them with historical evidence from 18th century England and France. The results show that incorporating these additional factors can help to explain a broader range of phenomena than is accounted for in existing studies.
||This is a pre-copy-editing, author-produced PDF of an article accepted for publication in the Journal of Law, Economics, and Organization following peer review. The definitive publisher-authenticated version 'Credible Commitment in Early Modern Europe: North and Weingast Revisited. Journal of Law, Economics, and Organization 18(1), 155-186, 2002' is available online at: http://jleo.oupjournals.org/cgi/content/abstract/18/1/155. LSE has developed LSE Research Online so that users may access research output of the School. Copyright © and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. Users may download and/or print one copy of any article(s) in LSE Research Online to facilitate their private study or for non-commercial research. You may not engage in further distribution of the material or use it for any profit-making activities or any commercial gain. You may freely distribute the URL (http://eprints.lse.ac.uk) of the LSE Research Online website.
|Library of Congress subject classification:
||J Political Science > JF Political institutions (General)
||06 Jul 2006
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