Credible Commitment in Early Modern Europe: North and Weingast Revisited

Research output: Contribution to journalReview article

Abstract

This article 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 eighteenth 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.

Original languageEnglish (US)
Pages (from-to)155-186
Number of pages32
JournalJournal of Law, Economics, and Organization
Volume18
Issue number1
StatePublished - Apr 2002

Fingerprint

commitment
credibility
indebtedness
eighteenth century
coalition
France
economy
ability
management
evidence
Government
Credible commitment
Factors
Owners
Credibility
Veto
18th century
England
Indebtedness
Government debt

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management
  • Law

Cite this

Credible Commitment in Early Modern Europe : North and Weingast Revisited. / Stasavage, David.

In: Journal of Law, Economics, and Organization, Vol. 18, No. 1, 04.2002, p. 155-186.

Research output: Contribution to journalReview article

@article{8219dae8bd894a52a6541a3ec65efdac,
title = "Credible Commitment in Early Modern Europe: North and Weingast Revisited",
abstract = "This article 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 eighteenth 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.",
author = "David Stasavage",
year = "2002",
month = "4",
language = "English (US)",
volume = "18",
pages = "155--186",
journal = "Journal of Law, Economics, and Organization",
issn = "8756-6222",
publisher = "Oxford University Press",
number = "1",

}

TY - JOUR

T1 - Credible Commitment in Early Modern Europe

T2 - North and Weingast Revisited

AU - Stasavage, David

PY - 2002/4

Y1 - 2002/4

N2 - This article 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 eighteenth 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.

AB - This article 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 eighteenth 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.

UR - http://www.scopus.com/inward/record.url?scp=0036245740&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0036245740&partnerID=8YFLogxK

M3 - Review article

VL - 18

SP - 155

EP - 186

JO - Journal of Law, Economics, and Organization

JF - Journal of Law, Economics, and Organization

SN - 8756-6222

IS - 1

ER -