This article investigates the politics of sovereign borrowing in Europe over the very long run+ I consider three alternative hypotheses regarding the sources of borrower credibility+ According to the first, European states with constitutional checks on executive authority found it easier to obtain credit at low interest rates than did states that lacked such constraints+ My second hypothesis focuses on state type~city-state versus territorial state! and the way in which this may have influenced

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... the balance of political power between owners of land and owners of capital in a society+ This hypothesis suggests that after controlling for other factors, one should observe that city-states in Europe found it easier to borrow than did larger territorial states, and that these city-states paid lower interest rates on their debt+ Finally, my third hypothesis suggests that borrower credibility depended on the simultaneous presence of both constitutional checks and balances and a city-state+ When one considers a broad sample of cases over a long time span there is strong support for the proposition involving city-states and merchant power, but less support for the argument that constitutional checks influenced credibility regardless of state type~citystate or territorial state!+ There is, however, some empirical evidence of an interaction effect whereby constitutional constraints on rulers made city-states particularly credible as borrowers+ My results are robust to a number of controls for alternative determinants, for sample selection bias, and for the endogeneity of city-state development+ I would like to thank Robert Fannion,