Trade, Self-Governance,and the Provision of Law and Order, with an Application To Medieval English Chartered Towns

Angelucci, Charles and Meraglia, Simone (2013) Trade, Self-Governance,and the Provision of Law and Order, with an Application To Medieval English Chartered Towns. TSE Working Paper, n. 13-443

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Official URL: http://tse-fr.eu/pub/27726

Abstract

We build a model to investigate the interaction between trade, the supply of law and order, and the nature of governing political institutions. To supply law and order necessary for a representative merchant to create wealth, a ruler (i) appoints officials capable of coercion and (ii) introduces a system of taxation. When potential gains from trade are important, the demand for law and order is high but appointing numerous officials capable of coercion may pave the way to arbitrary and distortive expropriation. Delegating the task of appointing offi- cials to the better-informed merchant lowers the cost of sustaining good market institutions, but exacerbates the latter's temptation to escape taxation. When gains from trade are instead low delegation never occurs. Our theory provides a rationale for the case of post-Norman Conquest England (1066-1307) where, in parallel with the rise of trade, kings increasingly give in to the citizens' desire of self-governance by granting Charters of Liberties.

Item Type: Monograph (Working Paper)
Language: English
Date: 23 October 2013
Uncontrolled Keywords: Institutions, Law Enforcement, Trade, Delegation, Taxation, Bureaucracy
JEL codes: D02 - Institutions - Design, Formation, and Operations
D23 - Organizational Behavior; Transaction Costs; Property Rights
D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption
P14 - Property Rights
P16 - Political Economy
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 17:39
Last Modified: 07 Mar 2018 13:22
OAI ID: oai:tse-fr.eu:27726
URI: http://publications.ut-capitole.fr/id/eprint/15767

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