How Did Britain Democratize? Views from the Sovereign Bond Market
Journal of Economic History
To assess competing theories of democratization, we analyze British sovereign bond market responses to the 1832, 1867, and 1884 Reform Acts, and to two failed Chartist agitations for reform. Analyses of high-frequency 3 percent consol yield data and historical financial press suggest three conclusions. First, democratic reform episodes were preceded by increases in perceived political risk, comparable to democratizing episodes in other countries. Second, both democratic reform and repression
... m and repression were followed by yield declines. Third, the source of political risk in Britain was both social unrest and political deadlock. Together, the findings challenge the "Whig" characterization of British democratization as exceptionally risk-free. T he process of democratization in Britain-in particular the franchise expansions legislated in the 1832, 1867, and 1884 Reform Acts-has attracted intensive scholarly attention. 1 One long-standing view, rooted , three anonymous reviewers, and seminar participants at Harvard, the Juan March Institute, UCLA, and Yale for comments, and Robert Brown and Stephen Easton for sharing data. All errors are our own. 1 In this article we follow the dominant strand in the social scientific literature that refers to "democratization" as the process of introducing democratic political institutions that began in Europe largely in the nineteenth century, with some precursors earlier, along three main dimensions: (1) the expansion and equalization of the right to vote (e.g., suffrage reform), (2) the "parliamentarization" of executive power by which cabinets increasingly reflected election outcomes, and (3) the institutionalization of civil liberties (e.g., freedom of the press, freedom of association, etc.) to protect against arbitrary rule. Our particular focus in this article is on franchise expansion, a central subject of contention in Britain and also the primary focus of the comparative literature. Our three-part conceptualization draws on Dahl (1971), Rueschemeyer, Stephens, and Stephens (1992) , Collier (1999, p. 24) and Ziblatt (2006) .