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Trade, Law and Order, and Political Liberties: Theory and Application to English Medieval Boroughs

Author

Listed:
  • Charles Angelucci

    (Columbia Business School, Columbia University.)

  • Simone Meraglia

    (Department of Economics, University of Exeter)

Abstract

We argue that trade opportunities, combined with the provision of law and order, may lead to local political liberties. In our model, a ruler chooses the size of an administration that (i) provides law and order for a merchant to use and (ii) collects taxes. Larger gains from trade increase the demand for law and order, which requires a larger administration. However, a larger administration is more difficult to monitor and allow local officials to expropriate merchants. When the resulting inefficiencies are significant, the ruler delegates control of the administration to the better-informed merchant, even though this makes tax evasion more tempting. We then analyze the emergence of local political liberties in post-Norman Conquest England (1066-1307) using data on taxation, commerce, and the behavior of local officials. This period marks the beginning of England's transition away from feudalism. We nd that trade expansion coincides with widespread misbehavior by ocials and, in line with the predictions of our model, an increasing willingness by the king to grant boroughs of high commercial value the right to elect local officials.

Suggested Citation

  • Charles Angelucci & Simone Meraglia, 2015. "Trade, Law and Order, and Political Liberties: Theory and Application to English Medieval Boroughs," Discussion Papers 1509, Exeter University, Department of Economics.
  • Handle: RePEc:exe:wpaper:1509
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    File URL: http://people.exeter.ac.uk/cc371/RePEc/dpapers/DP1509.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Institutions; Law and Order; Bureaucracy; Trade; Medieval England.;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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