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Political Institutions, Economic Liberty, and the Great Divergence

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  • Cox, Gary W.

Abstract

I argue that Europe's political fragmentation interacted with her political innovations—self-governing cities and national parliaments—to facilitate “economic liberty,” which in turn unleashed faster and more inter-connected urban growth. Examining urban growth over the period 600–1800 ce throughout Eurasia, I show that inter-city growth correlations were positive and significant only in Western Europe after 1200 ce. Within Western Europe, I show that growth correlations were greatest in the most fragmented and parliamentary areas, individual cities became significantly more tied to urban growth when their realms became parliamentary, and spillover effects (due to competition between rulers) were significant.

Suggested Citation

  • Cox, Gary W., 2017. "Political Institutions, Economic Liberty, and the Great Divergence," The Journal of Economic History, Cambridge University Press, vol. 77(3), pages 724-755, September.
    • Handle: RePEc:cup:jechis:v:77:y:2017:i:03:p:724-755_00
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    Cited by:

    1. Malinowski, Mikołaj, 2019. "Economic Consequences of State Failure—Legal Capacity, Regulatory Activity, and Market Integration in Poland, 1505–1772," The Journal of Economic History, Cambridge University Press, vol. 79(3), pages 862-896, September.
    2. Remi Jedwab & Noel D. Johnson & Mark Koyama, 2020. "Medieval Cities Through the Lens of Urban Economic Theories," Working Papers 2020-9, The George Washington University, Institute for International Economic Policy.
    3. Michel Serafinelli & Guido Tabellini, 2022. "Creativity over time and space," Journal of Economic Growth, Springer, vol. 27(1), pages 1-43, March.
    4. Lisa Blaydes & Christopher Paik, 2021. "Trade and Political Fragmentation on the Silk Roads: The Economic Effects of Historical Exchange between China and the Muslim East," American Journal of Political Science, John Wiley & Sons, vol. 65(1), pages 115-132, January.
    5. Rodríguez-Pose, Andrés & Wang, Han, 2021. "Local institutions and pandemics: City autonomy and the Black Death," CEPR Discussion Papers 16593, C.E.P.R. Discussion Papers.
    6. Philip T. Hoffman, 2020. "The Great Divergence: Why Britain Industrialised First," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 60(2), pages 126-147, July.
    7. Li Zhao & Chu Yujing, 2020. "Endogenous Institutions and Economic Growth: Evidence from China," Financial Sciences. Nauki o Finansach, Sciendo, vol. 25(1), pages 54-77, March.
    8. Jiwei Qian & Tuan‐Hwee Sng, 2021. "The state in Chinese economic history," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 61(3), pages 359-395, November.
    9. Ennio E. Piano, 2019. "State capacity and public choice: a critical survey," Public Choice, Springer, vol. 178(1), pages 289-309, January.
    10. Benjamin Schneider & Hillary Vipond, 2023. "The Past and Future of Work: How History Can Inform the Age of Automation," CESifo Working Paper Series 10766, CESifo.
    11. Jedwab, Remi & Johnson, Noel D. & Koyama, Mark, 2022. "Medieval cities through the lens of urban economics," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    12. Schneider, Benjamin & Vipond, Hillary, 2023. "The past and future of work: how history can inform the age of automation," Economic History Working Papers 119282, London School of Economics and Political Science, Department of Economic History.
    13. Dincecco, Mark & Wang, Yuhua, 2018. "Internal Conflict, Elite Action, and State Failure: Evidence from China, 1000-1911," MPRA Paper 87777, University Library of Munich, Germany.

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