Endogenous Parliaments: The Domestic and International Roots of Long-Term Economic Growth and Executive Constraints in Europe

Abstract

AbstractInstitutional constraints on executive behavior are commonly understood to be crucial constitutional features that limit state expropriation, protect property rights, and promote economic development. Combining new data describing the presence of parliamentary constraints for the entire European continent with data on city sizes, we build upon theories of endogenous economic growth to demonstrate that paths of both economic and political development over the long span of European history from 1200 to 1900 are the consequence of a common process of urban agglomeration. In doing so, we provide evidence that both outcomes—the existence of constraining institutions and growth—are driven by initial conditions that fostered technical know-how embodied in urban-dwelling artisans who, in turn, were able to force institutional limits on rulers’ actions. Hence, instead of reflecting a true underlying cause of development, parliamentary constraints are themselves outcomes determined by an endogenous process of growth.