Did the Glorious Revolution cause the Industrial Revolution
-
Upload
john-phelan -
Category
Documents
-
view
461 -
download
0
Transcript of Did the Glorious Revolution cause the Industrial Revolution
Yes – North & Weingast (1989)
• Before 1688 British monarchy arbitrarily seized wealth
• After 1688 Parliament put in place rules to constrain the Crown’s ability to do this
• This led to falling costs of capital (lower interest rates on government debt) which fostered private capital markets and stimulated investment
No – Sussman and Yafeh (2006)
• English/British government interest rates remained “high and volatile” until the 1730s
• Market for long term government debt remained illiquid
• Other countries did just as well
No – Clark (1996)
• England had declining interest rates before 1688
• Interest rates were not correlated with periods of ‘regime uncertainty’ as North & Weingast’s theory would suggest
• Property rights had been reasonably strong for 200 years before 1688
Critiques of Institutional Economics
• Chang (2011) argues that Institutional arguments such as North and Weingast’s muddles up causation – does growth lead to development of institutions rather than other way round?
• Institutions -> growth or Growth -> institutions?
If it wasn’t the Glorious Revolution, what was it?
• “An adequate explanation for the Industrial Revolution requires factors other than the emergence of stable private property rights” - Clark
The Industrial Revolution
• Growth pre dated 1688 (Clark)• So did institutional development (Szreter,
2007)• Science and technical innovation (Mokyr,
1994)