Risky institutions: political regimes and the cost of public borrowing in early modern Italy

Economic History Working Papers from London School of Economics and Political Science, Department of Economic History

Abstract: This paper tests whether and how political regimes influenced the cost of public borrowing by comparatively and quantitatively examining a newly compiled dataset on public annuities in early modern Italy. The analysis finds that overall political regimes mattered a lot, but there were important differences across their dimensions. Fiscal centralisation, particularly in the eighteenth century, was not associated with significant decreases in the interest rates. Jurisdictional fragmentation was on the whole the most important variable, with feudalism and to a lesser extent clerical influence significantly increasing the cost of borrowing. Constitution al representation was even more important than jurisdictional fragmentation within republics, but a republican constitution had an ambivalent effect: while it decreased the risk of default it could also lead to an increase in interest rates, depending on the specific institutional setting, contingency and path-dependency.

JEL-codes: N13 N43 (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-his, nep-mac and nep-pol
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Risky Institutions: Political Regimes and the Cost of Public Borrowing in Early Modern Italy (2014)
Working Paper: Risky institutions: political regimes and the cost of public borrowing in early modern Italy (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:wpaper:50815

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