The Glorious Revolution: Constitutional Reform and Income Distribution

In the work we have tried to explain why the delay in lowering theinterest rate on English government debt after the Glorious Revolutionis consistent with North and Weingast's thesis. The transfer of politicalpower from the Crown to Parliament was followed not only by an increasein tax revenue but also by substantial changes in its composition,namely a significant increase in the share of excise taxes relative to totalrevenue. Before the Glorious Revolution, Parliament was against theking having a predictable and reliable revenue, such as that raised by exciseduty. The availability of this income would have allowed the king tocount on continuous and abundant resources, freeing him from the need,in times of war, to convene Parliament to ask for authorization to increasetaxes. Having a large amount of predictable and certain resources at hisdisposal, the king could maintain a standing army. By eliminating this riskthe Glorious Revolution allowed the state to pursue the intensive growthof excise revenues. This policy choice was made by a coalition of interestgroups represented in Parliament, namely the landowners and moniedinterests. These groups decided to set up a bureaucracy and increase therevenue from indirect taxes. By this decision the groups represented inParliament shifted the tax burden of increasing public spending on to interestgroups that had no political representation.