Abstract

http://ssrn.com/abstract=2344497
 


 



Trade, Self-Governance, and the Provision of Law and Order, with an Application to Medieval English Chartered Towns


Charles Angelucci


Harvard University - Department of Economics

Simone Meraglia


University of Toulouse 1 - Toulouse School of Economics (TSE); New York University (NYU)

November 14, 2013


Abstract:     
We investigate the interaction between trade, the supply of law and order, and the nature of governing political institutions. To supply law and order necessary for a representative merchant to create wealth, a ruler (i) appoints officials and (ii) introduces a system of taxation. However, appointing numerous officials may pave the way to unobservable arbitrary and distortive expropriation. The ruler may escape the ensuing inefficiency by delegating the task of appointing officials to the better-informed merchant, at the cost of exacerbating his temptation to escape taxation. Delegation occurs when high potential gains from trade determine a high demand for law and order, and results in a lower cost of sustaining good market institutions. Our theory provides a rationale for the case of post-Norman Conquest England (1066-1307) where, in parallel with the rise of trade and the build-up of administrative power, kings increasingly give in to the citizens' desire of self-governance by granting Charters of Liberties.

Number of Pages in PDF File: 54

Keywords: Institutions, Law Enforcement, Trade, Delegation, Taxation, Bureaucracy

JEL Classification: D02, D23, D73, P14, P16

working papers series


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Date posted: October 25, 2013 ; Last revised: November 14, 2013

Suggested Citation

Angelucci, Charles and Meraglia, Simone, Trade, Self-Governance, and the Provision of Law and Order, with an Application to Medieval English Chartered Towns (November 14, 2013). Available at SSRN: http://ssrn.com/abstract=2344497 or http://dx.doi.org/10.2139/ssrn.2344497

Contact Information

Charles Angelucci (Contact Author)
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
Simone Meraglia
University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )
Place Anatole-France
Toulouse Cedex, F-31042
France
New York University (NYU) ( email )
Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States
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