Abstract
Separation of powers existed in the British Empire of North America long before the U.S. Constitution of 1789, yet little is known about the strategic foundations of this institutional choice. In this article, I argue that separation of powers helps an imperial crown mitigate an agency problem with its colonial governor. Governors may extract more rents from colonial settlers than the imperial crown prefers. This lowers the Crown’s rents and inhibits economic development by settlers. Separation of powers within colonies allows settlers to restrain the governor’s rent extraction. If returns to settler investment are moderately high, this restraint is necessary for colonial economic development and ultimately benefits the Crown. Historical evidence from the American colonies and the first British Empire is consistent with the model. This article highlights the role of agency problems as a distinct factor in New World institutional development, and in a sovereign’s incentives to create liberal institutions.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
