The Institutional Basis of Political Legitimacy: The Reformation and the Origin of the Modern Economy in England

This paper opens the ‘black box’ of endogenous political legitimacy and asks what role, if any, did political legitimacy play in the process rendering England the first modern economy, a colonial Empire and an exemplary democracy? Legitimacy entails obedience based on the moral obligation to follow the authority, and public displays of support from legitimizing agents increase legitimacy. Although the political authority can potentially select its legitimizing agents, the more the legitimizing agent has the power to decline supporting the authority, the higher legitimacy its support entails. Historically, the break with Rome that Henry VIII instituted during the English Reformation reduced the legitimizing power of the Church and the Tudors monarchs increasingly relied on Parliament as a legitimizing agent. They thus increased the power of the Parliament and its secular components. The endogenous change in the balance of political power was the ultimate source of the multiple institutional and policy changes that are the hallmark of England’s transformation. * We are grateful for comments received at the 2013 All-UC Economic History Meetings at Chapman University. All errors are ours. 1