Lec 21_Constitutions

Lec 21_Constitutions - European Economic History...

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5/10/10 European Economic History Institutions of Governance March 17, 2010 C. Shiue
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5/10/10 Historical context prior to 17th Prior to 17th century, political institutions placed power in the hands of kings and hereditary monarchs Power to renege on debts impose arbitrary taxation expropriate producers At the same time, relative lack of
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5/10/10 Institutional persistence In particular, why do “bad” institutions persist? In this case, Rulers want to hold on to power. This is good for the ruler, but not for society. Interests of rulers not aligned with interests of others in society Interests of rulers not aligned with overall economic growth
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5/10/10 Institutional change in North and Weingast: stable and secure property rights are necessary and sufficient for economic growth and this was achieved with the Glorious Revolution in England. p. 803: “For economic growth to occur the sovereign or government must not merely establish the relevant se
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5/10/10 Institutional change in “The so-called Glorious Revolution of 1688- 89 constitutes a major turning point not only in political and constitutional history, but in economic history as well. . .. the ease, cheapness, and stability of credit for public finance reacted favorably on private capital markets, making funds available for investment in agriculture, commerce, and industry.”
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This note was uploaded on 04/29/2010 for the course ECON 4514 taught by Professor Shuie during the Spring '08 term at Colorado.

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Lec 21_Constitutions - European Economic History...

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