Credible Commitment in Early Modern Europe: North and Weingast Revisited

D. Stasavage
2002 Journal of Law, Economics & Organization  
Stasavage 1 This paper 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
more » ... 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 18 th 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.
doi:10.1093/jleo/18.1.155 fatcat:wveyutnhgfhhvfgkfcl4axo3mq