IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Property rights and the first great divergence: Europe 1500–1800

Listed author(s):
  • Karayalcin, Cem

Recent literature on developing countries has revived interest in structural change involving the reallocation of resources from agriculture to industry. Here, we focus on the first such historically important structural transformation in which some parts of Europe escaped from the Malthusian trap centuries earlier than the Industrial Revolution, while others stagnated. There is as yet no consensus as to the causes of this First Great Divergence. The paper advances the thesis that what lies at the root of different paths is the type of property rights inherited. As populations everywhere in Europe recovered from the catastrophes of the late medieval period, what mattered for the direction taken was the size of the landlord class and their landholdings. In Western Europe where peasant proprietors tilled small plots, increases in population levels led to lower real wages. Given the low incomes of landlords and peasants, demand for manufactured goods remained low. At the other extreme, in eastern Europe, second serfdom kept wages low, and rents high. Yet given the small size of the land-owning class, these rents could not generate enough demand for high-end manufacturing processes either. Northwestern Europe, being in the middle in terms both of the size of the landholding classes and their properties, prospered as wages failed to decline even when population levels rapidly rose. Combined demand from landlords and workers kindled an expansion of the manufacturing sector.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S1059056015001768
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal International Review of Economics & Finance.

Volume (Year): 42 (2016)
Issue (Month): C ()
Pages: 484-498

as
in new window

Handle: RePEc:eee:reveco:v:42:y:2016:i:c:p:484-498
DOI: 10.1016/j.iref.2015.10.026
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620165

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Daron Acemoglu & Simon Johnson & James Robinson, 2005. "The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth," American Economic Review, American Economic Association, vol. 95(3), pages 546-579, June.
  2. Tasso Adamopoulos & Diego Restuccia, 2014. "The Size Distribution of Farms and International Productivity Differences," American Economic Review, American Economic Association, vol. 104(6), pages 1667-1697, June.
  3. Gregory Clark, 2005. "The Condition of the Working Class in England, 1209-2004," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1307-1340, December.
  4. Kiminori Matsuyama, 2002. "The Rise of Mass Consumption Societies," Journal of Political Economy, University of Chicago Press, vol. 110(5), pages 1035-1070, October.
  5. L. Rachel Ngai & Christopher A. Pissarides, 2007. "Structural Change in a Multisector Model of Growth," American Economic Review, American Economic Association, vol. 97(1), pages 429-443, March.
  6. N. F. R. Crafts & C. K. Harley, 1992. "Output growth and the British industrial revolution: a restatement of the Crafts-Harley view," Economic History Review, Economic History Society, vol. 45(4), pages 703-730, November.
  7. Millward, Robert, 1982. "An Economic Analysis of the Organization of Serfdom in Eastern Europe," The Journal of Economic History, Cambridge University Press, vol. 42(03), pages 513-548, September.
  8. John Komlos, 1989. "Nutrition and Economic Development in the Eighteenth-Century Habsburg Monarchy: An Anthropometric History," Books by John Komlos, Department of Economics, University of Munich, number 2.
  9. Robert C. Allen, 2003. "Progress and poverty in early modern Europe," Economic History Review, Economic History Society, vol. 56(3), pages 403-443, 08.
  10. Robert C. Allen, 2008. "A Review of Gregory Clark's A Farewell to Alms: A Brief Economic History of the World," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 946-973, December.
  11. Wim F.V. Vanthoor, 1996. "European Monetary Union Since 1848," Books, Edward Elgar Publishing, number 1136.
  12. Oded Galor & Omer Moav, 2004. "From Physical to Human Capital Accumulation: Inequality and the Process of Development," Review of Economic Studies, Oxford University Press, vol. 71(4), pages 1001-1026.
  13. Reto Foellmi & Josef Zweimuller, 2006. "Income Distribution and Demand-Induced Innovations," Review of Economic Studies, Oxford University Press, vol. 73(4), pages 941-960.
  14. Afonso, António & Jalles, João Tovar, 2013. "Growth and productivity: The role of government debt," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 384-407.
  15. Kevin M. Murphy & Andrei Shleifer & Robert Vishny, 1989. "Income Distribution, Market Size, and Industrialization," The Quarterly Journal of Economics, Oxford University Press, vol. 104(3), pages 537-564.
  16. Margarida Duarte & Diego Restuccia, 2010. "The Role of the Structural Transformation in Aggregate Productivity," The Quarterly Journal of Economics, Oxford University Press, vol. 125(1), pages 129-173.
  17. Williamson, Jeffrey G., 1984. "Why Was British Growth So Slow During the Industrial Revolution?," The Journal of Economic History, Cambridge University Press, vol. 44(03), pages 687-712, September.
  18. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 143-179.
  19. de Vries, Jan, 1994. "The Industrial Revolution and the Industrious Revolution," The Journal of Economic History, Cambridge University Press, vol. 54(02), pages 249-270, June.
  20. Berthold Herrendorf & Christopher Herrington & Ákos Valentinyi, 2015. "Sectoral Technology and Structural Transformation," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(4), pages 104-133, October.
  21. Douglas Gollin & Stephen Parente & Richard Rogerson, 2002. "The Role of Agriculture in Development," American Economic Review, American Economic Association, vol. 92(2), pages 160-164, May.
  22. Bilancini Ennio & D'Alessandro Simone, 2008. "Functional Distribution, Land Ownership and Industrial Takeoff: The Role of Effective Demand," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-36, August.
  23. anonymous, 1956. "Prices during the economic expansion," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jan, pages 1-7.
  24. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  25. Rapp, Richard T., 1975. "The Unmaking of the Mediterranean Trade Hegemony: International Trade Rivalry and the Commercial Revolution," The Journal of Economic History, Cambridge University Press, vol. 35(03), pages 499-525, September.
  26. Allen, Robert C., 2000. "Economic structure and agricultural productivity in Europe, 1300 1800," European Review of Economic History, Cambridge University Press, vol. 4(01), pages 1-25, April.
  27. Carletto, Calogero & Savastano, Sara & Zezza, Alberto, 2013. "Fact or artifact: The impact of measurement errors on the farm size–productivity relationship," Journal of Development Economics, Elsevier, vol. 103(C), pages 254-261.
  28. Allen, Robert C., 1992. "Enclosure and the Yeoman: The Agricultural Development of the South Midlands 1450-1850," OUP Catalogue, Oxford University Press, number 9780198282969.
  29. Mokyr, Joel, 1977. "Demand vs. Supply in the Industrial Revolution," The Journal of Economic History, Cambridge University Press, vol. 37(04), pages 981-1008, December.
  30. Berthold Herrendorf & Richard Rogerson & ?kos Valentinyi, 2013. "Two Perspectives on Preferences and Structural Transformation," American Economic Review, American Economic Association, vol. 103(7), pages 2752-2789, December.
  31. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941 Elsevier.
  32. anonymous, 1956. "Interest rates during economic expansion," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Sep, pages 927-935.
  33. Patrick Karl O'Brien, 1996. "Path dependency, or why Britain became an industrialized and urbanized economy long before France," Economic History Review, Economic History Society, vol. 49(2), pages 213-249, 05.
  34. Gollin, Douglas & Rogerson, Richard, 2014. "Productivity, transport costs and subsistence agriculture," Journal of Development Economics, Elsevier, vol. 107(C), pages 38-48.
  35. Eastwood, Robert & Lipton, Michael & Newell, Andrew, 2010. "Farm Size," Handbook of Agricultural Economics, Elsevier.
  36. Michael Kremer, 1993. "Population Growth and Technological Change: One Million B.C. to 1990," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 681-716.
  37. Duplessis,Robert S., 1997. "Transitions to Capitalism in Early Modern Europe," Cambridge Books, Cambridge University Press, number 9780521394659, September.
  38. Feinstein, Charles H., 1998. "Pessimism Perpetuated: Real Wages and the Standard of Living in Britain during and after the Industrial Revolution," The Journal of Economic History, Cambridge University Press, vol. 58(03), pages 625-658, September.
  39. J. V. Beckett, 1984. "The Pattern of Landownership in England and Wales, 1660-1880," Economic History Review, Economic History Society, vol. 37(1), pages 1-22, 02.
  40. Oecd, 1999. "European Principles for Public Administration," SIGMA Papers 27, OECD Publishing.
  41. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1995. "Power, distortions, revolt and reform in agricultural land relations," Handbook of Development Economics,in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 42, pages 2659-2772 Elsevier.
  42. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
  43. Vries,Jan de, 2008. "The Industrious Revolution," Cambridge Books, Cambridge University Press, number 9780521895026, September.
  44. North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 803-832, December.
  45. Ergungor, O. Emre, 2008. "Financial system structure and economic growth: Structure matters," International Review of Economics & Finance, Elsevier, vol. 17(2), pages 292-305.
  46. Quinn, Stephen, 2001. "The Glorious Revolution'S Effect On English Private Finance: A Microhistory, 1680 1705," The Journal of Economic History, Cambridge University Press, vol. 61(03), pages 593-615, September.
  47. Peter Earle, 1989. "The female labour market in London in the late seventeenth and early eighteenth centuries," Economic History Review, Economic History Society, vol. 42(3), pages 328-353, 08.
  48. Duplessis,Robert S., 1997. "Transitions to Capitalism in Early Modern Europe," Cambridge Books, Cambridge University Press, number 9780521397735, September.
  49. Vries,Jan de, 2008. "The Industrious Revolution," Cambridge Books, Cambridge University Press, number 9780521719254, September.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:42:y:2016:i:c:p:484-498. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.