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Accounting for the ‘Little Divergence’ What drove economic growth in preindustrial Europe, 1300-1800?

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  • Alexandra M. de Pleijt
  • Jan Luiten van Zanden

Abstract

The Little Divergence is the process of differential economic growth within Europe in the period between 1300 and 1800, during which the North Sea Area developed into the most prosperous and dynamic part of the Continent. We test various hypotheses about the causes of the Little Divergence, using new data and focusing on trends in GDP per capita. The results are that institutional changes (in particular the rise of active Parliaments), human capital formation and structural change are the primary drivers of the growth that occurred, which contrast sharply with previous findings by Robert Allen (who however focused on real wages as dependent variable). We also test for the role of religion (the spread of Protestantism): this has affected human capital formation, but does not in itself have an impact on growth. Moreover, we find an insignificant effect of the land-labour ratio, which shows the limitations of the Malthusian model for understanding the Little Divergence.

Suggested Citation

  • Alexandra M. de Pleijt & Jan Luiten van Zanden, 2013. "Accounting for the ‘Little Divergence’ What drove economic growth in preindustrial Europe, 1300-1800?," Working Papers 0046, Utrecht University, Centre for Global Economic History.
  • Handle: RePEc:ucg:wpaper:0046
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    Cited by:

    1. Sarah Guilland Carmichael & Alexandra de Pleijt & Jan Luiten van Zanden & Tine De Moor, 2015. "Reply to Tracy Dennison and Sheilagh Ogilvie: The European Marriage pattern and the Little Divergence," Working Papers 0070, Utrecht University, Centre for Global Economic History.
    2. David Le Bris & William N. Goetzmann & Sébastien Pouget, 2015. "The Development of Corporate Governance in Toulouse: 1372-1946," NBER Working Papers 21335, National Bureau of Economic Research, Inc.
    3. Ekaterina Khaustova & Paul Sharp, 2015. "A Note on Danish Living Standards through Historical Wage Series, 1731-1913," Working Papers 0081, European Historical Economics Society (EHES).
    4. BASSINO, Jean-Pascal & ENG, Pierre van der, 2016. "Asia's 'Little Divergence' in the 20th Century: Evidence from PPP-based direct estimates of GDP per capita, 1913-1969," Discussion paper series HIAS-E-28, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    5. Guido Alfani & Wouter Ryckbosch, 2015. "Was there a ‘Little Convergence’ in inequality? Italy and the Low Countries compared, ca. 1500-1800," Working Papers 557, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.

    More about this item

    Keywords

    Europe; economic growth; Little Divergence; institutional change;

    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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