Abstract
With use of innovative proxies and new annual data, I demonstrate that relatively high legal capacity and regulatory activity of the early-modern Polish parliament, the Seym, was positively associated with deeper domestic commodity market integration. Conversely, the lack of effective law-making, caused by the right of a single delegate to discontinue the Seym’s sessions, fostered market fragmentation. This indicates that early parliamentary regimes required legal capacity to harmonize domestic institutions and reduce the transaction costs. The Polish case suggests a hypothesis that the pre-1800 “Little Divergence” between European parliamentary regimes could be explained by differences in their governments’ capacities.
Highlights
What factors allowed certain regions of Europe to develop their market economies early on and what were the reasons for the relative stagnation of the less successful areas? what was the role of the early-modern transition from feudalism to semi-centralised and relatively powerful territorial states in setting the stage for modern economic growth? Political institutions are argued to be crucial determinants of prosperity (e.g., Acemoglu and Robinson 2012)
England/Britain, the Netherlands, and the rest of Europe is often linked to the formation of territorial parliamentary regimes in the two successful countries (e.g., Van Zanden, Buringh, and Bosker 2012; Broadberry and Wallis 2017)
The fact that not all preindustrial parliamentary regimes succeeded economically demonstrates that the consolidation of power around a parliament is an insufficient condition for sustained economic growth
Summary
It elected parliamentary commissioners that travelled around the country to enforce the Seym’s regulations, such as the toll sizes To demonstrate the impact of the Seym on institutional harmonisation, I complement the index of legal capacity (Figure 1), with an original measure of the Seym’s regulatory output. I group the regulations imposed by the Seym into eight areas of regulatory activity that stand out in the source material, that is, laws regulating, unifying, standardising, and/or promoting: (1) uniform taxation, (2) tolls, (3) trade infrastructure, (4) measures, (5) trade access, (6) monetary policy, (7) contract enforcement, and (8) courts’ operations.
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