Constitution et engagement (document en anglais)

Douglass C. North and Barry R. Weingast are two economists known for their work in the field of economic history and more precisely for their theories on economic and institutional changes.

“Constitutions and commitment: The Evolution of Institutional Governing Public Choice in Seventeenth-Century England” is an essay written by Douglass C. North and Barry R. Weingast published in 1989.

The authors observe two steps in the evolution of institutions in 17th century England, the Glorious Revolution being the turning point of these institutional changes. Britain was a model of development for the other European countries because it was the first nation to undergo an Industrial Revolution and to embark on the path of modern economic growth. According to North and Weingast this advanced development was the consequence of the institutional evolutions experienced during the 17th century and specifically the establishment of modern property rights.

An institution is a set of rules, conventions and norms, responsible for structuring the interactions among the actors of the economy. At the beginning of the text, the authors explain why institutions are so important for an economy. They argue that the development of a free market economy must be accompanied by new rules and specific institutions and therefore that institutional reforms are a prerequisite to economic growth.

First, we can analyze the evolution of institutions before the Glorious revolution. In 1603, the Stuarts came to power and the King decided to “live on his own”, choosing how and on what the money should be spent. During this period, the Parliament had almost no power and played a small role in the economy, conflicts between the Crown and the Parliament were common. According to the authors, this was a dark time for England because the State experienced a severe shortage of income. In 1617, the Crown's expenses exceeded its earnings and the country had a deficit. To find money, the Stuarts enforced new taxes and required “forced loans”. We call them “forced loans” because the King did not usually honor his contractual obligations and repayment was highly unpredictable. Furthermore, to find new revenues, the Crown also seized the property of citizens and granted monopolies. During these years, the King was accused to ignore civil liberties and property rights and the Parliament struggled to reduce the Crown’s power, refusing to raise money for the King unless he bowed to their demands. The Crown was evidently unwilling to accept these restrictions, hence the numerous dissolutions of the Parliament during this period. The power of the King was tremendous, he could abrogate or suspend laws at will and use the Star Chamber to suppress opposition to his policies.

The Parliament dissolved the Star Chamber in 1641 in an attempt at limiting the King's power and in 1642, tensions between the Crown and the Parliament finally led to the outburst of the English Civil War that devastated the country during nine years. The monarchy and the House of Lords were subsequently abolished and Oliver Cromwell undertook the difficult task to rebuild the political and institutional landscape of England. However the death of Cromwell in 1658 sealed the fate of the Republican government of the Commonwealth of England and in 1660, Charles II restored the monarchy with the approval of the Parliament.

Years later,

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