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Risky institutions: political regimes and the cost of public borrowing in early modern Italy

Chilosi, David ORCID: 0000-0002-2251-0381 (2013) Risky institutions: political regimes and the cost of public borrowing in early modern Italy. Economic History working papers (177/13). Department of Economic History, London School of Economics and Political Science, London, UK.

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This paper tests whether and how political regimes influenced the cost of public borrowing by comparatively and quantitatively examining a newly compiled dataset on public annuities in early modern Italy. The analysis finds that overall political regimes mattered a lot, but there were important differences across their dimensions. Fiscal centralisation, particularly in the eighteenth century, was not associated with significant decreases in the interest rates. Jurisdictional fragmentation was on the whole the most important variable, with feudalism and to a lesser extent clerical influence significantly increasing the cost of borrowing. Constitution al representation was even more important than jurisdictional fragmentation within republics, but a republican constitution had an ambivalent effect: while it decreased the risk of default it could also lead to an increase in interest rates, depending on the specific institutional setting, contingency and path-dependency.

Item Type: Monograph (Working Paper)
Official URL:
Additional Information: © 2013 The Author
Divisions: Economic History
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HJ Public Finance
JEL classification: N - Economic History > N1 - Macroeconomics and Monetary Economics; Growth and Fluctuations > N13 - Europe: Pre-1913
N - Economic History > N4 - Government, War, Law, and Regulation > N43 - Europe: Pre-1913
Date Deposited: 14 Jun 2013 14:38
Last Modified: 16 May 2024 11:59

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