This paper develops the empirical and theoretical case that differences in economic institutions are the fundamental cause of differences in economic development. We first document the empirical importance of institutions by focusing on two “quasi-natural experiments” in history, the division of Korea into two parts with very different economic institutions and the colonization of much of the world by European powers starting in the fifteenth century. We then develop the basic outline of a framework for thinking about why economic institutions differ across countries. Economic institutions determine the incentives of and the constraints on economic actors, and shape economic outcomes. As such, they are social decisions, chosen for their consequences. Because different groups and individuals typically benefit from different economic institutions, there is generally a conflict over these social choices, ultimately resolved in favor of groups with greater political power. The distribution of political power in society is in turn determined by political institutions and the distribution of resources. Political institutions allocate de jure political power, while groups with greater economic might typically possess greater de facto political power. We therefore view the appropriate theoretical framework as a dynamic one with political institutions and the distribution of resources as the state variables. These variables themselves change over time because prevailing economic institutions affect the distribution of resources, and because groups with de facto political power today strive to change political institutions in order to increase their de jure political power in the future. Economic institutions encouraging economic growth emerge when political institutions allocate power to groups with interests in broad-based property rights enforcement, when they create effective constraints on power-holders, and when there are relatively few rents to be captured by power-holders. We illustrate the assumptions, the workings and the implications of this framework using a number of historical examples.

Chapter 6 Institutions as a Fundamental Cause of Long-Run Growth

This paper develops the empirical and theoretical case that differences in economic institutions are the fundamental cause of differences in economic development. We first document the empirical importance of institutions by focusing on two 'quasi-natural experiments' in history, the division of Korea into two parts with very different economic institutions and the colonization of much of the world by European powers starting in the fifteenth century. We then develop the basic outline of a framework for thinking about why economic institutions differ across countries. Economic institutions determine the incentives of and the constraints on economic actors, and shape economic outcomes. As such, they are social decisions, chosen for their consequences. Because different groups and individuals typically benefit from different economic institutions, there is generally a conflict over these social choices, ultimately resolved in favor of groups with greater political power. The distribution of political power in society is in turn determined by political institutions and the distribution of resources. Political institutions allocate de jure political power, while groups with greater economic might typically possess greater de facto political power. We therefore view the appropriate theoretical framework as a dynamic one with political institutions and the distribution of resources as the state variables. These variables themselves change over time because prevailing economic institutions affect the distribution of resources, and because groups with de facto political power today strive to change political institutions in order to increase their de jure political power in the future. Economic institutions encouraging economic growth emerge when political institutions allocate power to groups with interests in broad-based property rights enforcement, when they create effective constraints on power-holders, and when there are relatively few rents to be captured by power-holders. We illustrate the assumptions, the workings and the implications of this framework using a number of historical examples.

Institutions as the Fundamental Cause of Long-Run Growth

Why did the industrial revolution take place in eighteenth-century Britain and not elsewhere in Europe or Asia? In this convincing new account Robert Allen argues that the British industrial revolution was a successful response to the global economy of the seventeenth and eighteenth centuries. He shows that in Britain wages were high and capital and energy cheap in comparison to other countries in Europe and Asia. As a result, the breakthrough technologies of the industrial revolution - the steam engine, the cotton mill, and the substitution of coal for wood in metal production - were uniquely profitable to invent and use in Britain. The high wage economy of pre-industrial Britain also fostered industrial development since more people could afford schooling and apprenticeships. It was only when British engineers made these new technologies more cost-effective during the nineteenth century that the industrial revolution would spread around the world.

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The British Industrial Revolution in Global Perspective

This essay, in two parts, argues for the centrality of historical thinking in coming to grips with capitalism’s planetary crises of the twenty-first century. Against the Anthropocene’s shallow hist...

The Capitalocene, Part I: on the nature and origins of our ecological crisis

Most work on the relationship between farm size and productivity strongly suggests that farms that rely mostly on family labor are more productive than large farms operated primarily by hired labor. This study began as an inquiry into how rental and sales markets for agricultural land in the developing world affect efficiency and equity. What emerged was the clear sense that great variations in land relations around the world and over time cannot be understood in the common paradigm of property rights and competitive markets. Under that paradigm, land scarcity leads to better definition of rights, which are then traded in sales and rental markets accessible equally to all players. The outcome should be the allocation of land to the most efficient uses and users, yet this rarely happens. Instead, land rights and ownership tend to grow out of power relationships. Landowning groups have used coercion and distortions in land, labor, credit, and commodity markets to extract economic rents from the land, from peasants and workers, and most recently from urban consumer groups or taxpayers. Such rent-seeking activities reduce the efficiency of resource use, retard growth, and increase the poverty of the rural population. The authors examine how these power relations emerged and what legal means enabled relatively few landowners to accumulate and hold on to large landholdings. The authors discuss the successes and failures of reform in market and socialist economies, and the perversions of reforms in both systems, manifested in large commercial farms and collectives. They survey the history of land relations and the legacies that history leaves. They discuss the three analytical controversies surrounding economies of scale, and the efficiency of the land sales and land rental market. They discuss the main policy issues and implications of various distortions and successful and unsuccessful reforms in the developing world, including land registration and titling, land taxation, regulations restricting land sales and rentals, fragmentation and consolidation of land, redistributive land reform, and decollectivization. In an epilogue on methodology, the authors examine how various strands of economic theory have contributed, or failed to contribute, to the explanation of variations in policies, distortions, and land relations over space and time.

Power, distortions, revolt, and reform in agricultural land relations

Preface Introduction R. H. Hilton 1. Agrarian class structure and economic development in pre-industrial Europe Robert Brenner 2. Population and class relations in feudal society M. M. Postan and John Hatcher 3. Agrarian class structure and the development of capitalism: France and England compared Patricia Croot and David Parker 4. Peasant organization and class conflict in Eastern and Western Germany Heide Wunder 5. A reply to Robert Brenner Emmanuel Le Roy Ladurie 6. Against the neo-malthusian orthodoxy Guy Bois 7. A crisis of feudalism R. H. Hilton 8. In search of agrarian capitalism J. P. Cooper 9. Agrarian class structure and economic development in pre-industrial bohemia Arnost Klima 10. The Agrarian roots of European capitalism Robert Brenner Index.

The Brenner Debate; Agrarian Class Structure and Economic Development in Pre-Industrial Europe

The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe

Few historical issues have occasioned such discussion since at least the time of Marx as the transition from feudalism to capitalism in Western Europe. The Brenner Debate, which reprints from Past and Present various article in 1976, is a scholarly presentation of a variety of points of view, covering a very wide range in time, place and type of approach. Weighty theoretical responses to Brenner's first formulation followed from the late Sir Michael Postan, John Hatcher, Emmanuel Le Roy Ladurie and Guy Bois; more particular contributions came from Patricia Croot, David Parker, Arnost KlA¬ma and Heide Wunder on England, France, Bohemia and Germany; and reflective pieces from R. H. Hilton and the late J. P. Cooper. Completing the volume, and giving it an overall coherence, are Brenner's own comprehensive response to those who had taken part in the debate, and also R. H. Hilton's introduction that aims to bring together the major themes in the collection of essays. The debate has already aroused widespread interest among historians and scholars in allied fields as well as among ordinary readers, and may reasonably be regarded as one of the most important historical debates of prevailing years.

C. H. E. Philpin

Papers

The Brenner Debate; Agrarian Class Structure and Economic Development in Pre-Industrial Europe

The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe

The Brenner Debate

The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe.

The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe.