Working Paper: CEPR ID: DP3723
Authors: Graziella Bertocchi
Abstract: This Paper looks at the historical evolution of the relationship between an economy?s structure and the corresponding political system, with a focus on the European experience, starting from feudal times. We show why, in an early agricultural phase, aristocratic political systems prevail, while democracies tend to emerge with industrialization. At the same time the law of inheritance evolves from primogeniture to equal partition, as the primary source of wealth shifts from land to capital. The model also replicates the historical stylized facts of output growth and its sectoral composition, income and wealth distribution, and class structure.
Keywords: Aristocracy; Democracy; Industrialization; Land; Primogeniture
JEL Codes: J12; N10; O40; P10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| evolution of inheritance laws (K36) | political power dynamics (D72) |
| economic structure (L16) | political systems (P16) |
| primogeniture laws (K36) | concentration of political power (D72) |
| shift from land to capital (E22) | democratization of political systems (P39) |
| laws of inheritance evolve from primogeniture to equal partition (J12) | broader distribution of wealth and political power (D39) |
| economic conditions fostered by industrialization (N11) | emergence of democracy (D72) |
| abolition of feudal tax systems (P32) | income and wealth equalization (D31) |
| income and wealth equalization (D31) | political participation (D72) |
| economic development (O29) | process of democratization (D72) |