Marketing Sovereign Promises: The English Model

In: The journal of economic history, Volume 75, Issue 1, p. 190-218

Abstract

The difficulty sovereign actors face in making their promises credible is widely appreciated (e.g., North and Weingast 1989; Myerson 2008). In this article, I argue that the English repeatedly usedinstitutions of monopoly brokerageto mediate trades between the sovereign (offering various promises) and subjects (offering revenues). Once set up—at different times in different markets—institutions of monopoly brokerage sparked substantial and abrupt growth in state revenues. Moreover, these revenue increases cannot be explained by changes in promise-holders' ability to punish nonperformance, changes in the preferences of pivotal state decision makers, or changes in high constitutional structure alone.