Institutional Change and English Economic Development : Evidence from the Early Transport Revolution

Abstract There is a growing consensus that institutions are linked with economic development, but identifying the effects of institutional changes has proven to be difficult. This book offers new insights by studying the role of political and legal changes in fostering investment during the early transportation revolution in England. First, it argues that the political settlement between Crown and Parliament made improvement rights more secure and increased incentives for investment. Conflict between political parties had little effect however. Second, it argues that greater competition for seats in the Commons contributed to investment by lowering the cost of obtaining transportation improvement rights. The effects of electoral competition changed, however, depending on whether MPs belonged to the majority party. Third, the book argues that the empowerment of juries in eminent domain proceedings had mixed effects. Juries lowered incentives by granting compensation well above the market value of land, but they helped to diffuse opposition to transportation improvement bills in Parliament. This introductory chapter reviews the contemporary and historical debate on institutions and provides an overview of the early transportation revolution in England. It also gives a summary of the argument and previews the evidence.