The Impact of Government on Economic Development and Growth in Pre-industrial Europe*

In pre-industrial Europe, the pace of economic development and growth varied across territories and over time. Much of this variation was due to the changing impact of government on the economies in question. Government affected the economy principally through its command of violence. We therefore begin by exploring the relationship between violence and economic activity and the relationship between government and violence. We then examine in turn the three major channels through which government and its command of violence affected the economy—exaction, peace and order, and association. Lastly, we compare the economic impact of different government regimes. Was weak government or strong government more conducive to economic development and growth? JEL Categories: N430, K000, H100, H200, H770, O570 *This paper is a draft chapter of The Origins of Western Economic Success: Commerce, Finance, and Government in Pre-Industrial Europe. Other draft chapters may be downloaded from http://www.dartmouth.edu/~mkohn/