Credible Commitment in Early Modern Europe: North and Weingast Revisited

Posted: 15 Jan 2002

Abstract

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 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 18th 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.

Suggested Citation

Stasavage, David, Credible Commitment in Early Modern Europe: North and Weingast Revisited. Journal of Law, Economics, and Organization, Vol. 18, No. 1, pp. 155-186, 2002. Available at SSRN: https://ssrn.com/abstract=291799

David Stasavage (Contact Author)

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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