Institutions and Economic Growth in Historical Perspective: Part 2

60 Pages Posted: 9 Jul 2014

See all articles by Sheilagh Ogilvie

Sheilagh Ogilvie

All Souls College, Oxford; CESifo (Center for Economic Studies and Ifo Institute)

André W. Carus

University of Cambridge - Faculty of Economics

Date Written: June 25, 2014

Abstract

This is Part 2 of a two-part paper which surveys the historical evidence on the role of institutions in economic growth. The paper provides a critical scrutiny of a number of stylized facts widely accepted in the growth literature. It shows that private-order institutions have not historically substituted for public-order ones in enabling markets to function; that parliaments representing wealth holders have not invariably been favourable for growth; and that the Glorious Revolution of 1688 did not mark the sudden emergence of either secure property rights or economic growth. Economic history has been used to support both the centrality and the irrelevance of secure property rights to growth, but the reason for this is conceptual vagueness. Secure property rights require much more careful analysis, distinguishing between rights of ownership, use and transfer, and between generalized and particularized variants. Similar careful analysis would, we argue, clarify the growth effects of other institutions, including contract-enforcement mechanisms, guilds, communities, serfdom, and the family. Greater precision concerning institutional effects on growth can be achieved by developing sharper criteria of application for conventional institutional labels, endowing institutions with a scale of intensity or degree, and recognizing that the effects of each institution depend on its relationship with other components of the wider institutional system. Part 2 of the paper examines how institutions are situated in wider institutional systems, explores alternative approaches to explaining institutions, and applies the arguments established in earlier sections to the institution of serfdom. It concludes by drawing the implications of both parts of the paper for institutions and economic growth in historical perspective.

Keywords: institutions, economic growth, economic history, private-order institutions, public-order institutions, parliaments, property rights, contract enforcement, guilds, serfdom, the family, Maghribi traders, Champagne fairs, European Marriage Pattern

JEL Classification: N01, N30, N40, N50, N70, O17, P00

Suggested Citation

Ogilvie, Sheilagh and Carus, André W., Institutions and Economic Growth in Historical Perspective: Part 2 (June 25, 2014). CESifo Working Paper Series No. 4862, Available at SSRN: https://ssrn.com/abstract=2463601

Sheilagh Ogilvie (Contact Author)

All Souls College, Oxford ( email )

All Souls College
Oxford, OX1 4AL
United Kingdom
44-7799-870245 (Phone)

HOME PAGE: http://https://www.asc.ox.ac.uk/person/3498

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

André W. Carus

University of Cambridge - Faculty of Economics ( email )

Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

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