north+_1989_jeh_803-832_constitutions_and_commitment_the_evolution_of_institutional_governing_public_choice_in_seventeenth-century_england North, D. Weingast, B. 1989 We attempt to explain the evolution of political institutions in seventeenth-century England, focusing on the fundamental institutions of representative government emerging out of the Glorious Revolution of 1688 - a Parliament with a central role alongside the Crown adn a judiciary independent of the Crown. In the early seventeenth century fiscal needs led to increased levels of "arbitrary" government, that is, to expropriation of welath through redefintion of rights in the sovereign's favor. This led, ultimately, to the civil war. Several failed experiments with alternative political institutions in turn ushered in the restoration of the monarchy in 1660. This too failed, resulting in the Glorious Revolution of 1688 and its fundamental redesign of the fiscal and governmental institutions.

Revenue Raising

  1. THE central problem/issue in early modern period for the crown
  2. Stuarts inherited debt from Elizabeth II and continually ran deficit until 1630s. They didn't want to deal with parliament to get funds but went for a whole set of extra-parliamentary routes of revenue raising such as 1. forced loans 2. grants of monopoly 3. usurping property rights and arbitrary imposition of laws 4. manipulation of ward estates. This, i feel, is classic demonstration of bounded rationality and the influence of cultural/religious/ideological factors on outcomes. As later kings found out (see below) Parliament could provide more fund than they could dream of but the Stuarts didn't see this. Why? Because of bounded rationality + with e.g. Charles I the influence of his absolutist beliefs - he just wasn't willing to do the deals to acknowledge the dependence.
  3. After 1688 William and Mary have accepted a new deal. Plus and v. important in my view: 1. parliament has shown twice that it will fight crown (credible threat) 2. discovery by crown that in this more stable situation Parliament can actually provide MORE funds to crown that he would get by absolutist approach .
Why did Parliament behave as badly as crown?
  1. Much wider base of support
  2. The Crown demands, Commons grants, the Lords assent to the grant. 3 players now involved.
  3. Common law (property pro) independent judiciary heavily supported by Whig oligarchy (which is both ideologically and constituencially pro-business).
Lengthy section giving evidence that post Glorious Revolution (1688):
  1. Government could borrow a lot more money (10 times as much by mid 1690s) at lower rates of interest
  2. That other credit systems grew rapidly.
    • Stock market 5-20x between 1688 and 1715-1740 period.
    • Banking: 1. Bank of England founded 1694 and deposits and discouting business grow (10x 1688 to 1730, 10x again 1730 to 1760) 2. Expansion of other private banks
This is all evidence for more secure property rights and importance of institutions.

Ideas for further research

  1. Tracing changes in parliamentary rights and property rights in more detail (quantatively)