The debate over the institutions that link economic growth to public finance tends to disregard the need for savings to finance growing public debt. In seventeenth-century Holland the structure, size, and issuing rates of the debt were determined by investors' preferences, wealth accumulation, and changing private investment opportunities. The growth of savings enabled the creation of a huge debt largely with short-term bills. Issuing rates dropped because savings outstripped private investment alternatives. In Holland, and probably elsewhere as well, credible commitment and efficient fiscal institutions were necessary, but not sufficient to create liquid secondary markets and low costs of capital.

Department stores represented one of the most advertising-intensive sectors of American interwar retailing. Yet it has been argued that a competitive spiral of high advertising spending, to match the challenge of other local department stores, contributed to an inflation of operating costs that eroded long-term competitiveness. We test these claims, using both qualitative archival data and establishment-level national data sets. The quantitative analysis confirms that the relationship between advertising expenditure and sales deteriorated markedly over the period, but indicates that the growing negative impact of retaliatory advertising by rival department stores was less important than contemporaries perceived.

The Knappschaft was a mutual association through which German miners insured themselves against accident, illness, and old age. The Knappschaft underlies Bismarck's sickness and accident insurance legislation, and thus Germany's system today. This article focuses on moral hazard, which plagued the Knappschaften in the later nineteenth century. Sick pay made it attractive for miners to feign illness that made them unable to work. We outline the moral hazard problem the Knappschaften faced as well as the mechanisms they devised to control it, and then use econometric models to demonstrate that those mechanisms were at best imperfect.

Educational institutions and intergenerational mobility are closely related; access to schools is a major determinant of a child's future success. This article offers new insight into this relationship with a study of mobility at the beginning of the United States' expansion of public schools in the early twentieth century. A new intergenerational data set is used to establish high rates of income mobility at the start of the century and a negative relationship between school quality and mobility. Educational attainment estimates reveal that this was a product of high-income families being more responsive to improving schools than poor families.

I reexamine Douglass North and Barry Weingast's argument regarding credible commitment and sovereign debt in post-revolution England. The central problem that the architects of the revolution settlement had to solve, I argue, was not the king's frequent reneging on financial commitments (a symptom), but the moral hazard that generated the kings' malfeasance (the underlying cause). The central element of the revolution settlement was thus not better holding kings to their commitments, but better holding royal advisors to account for all consequences of the Crown's policies—through what we now call ministerial responsibility.

Until the 1790s marine insurance in the United States was organized by brokers and underwritten by private individuals. Beginning in 1792, however, the private underwriters had to compete with newly formed marine insurance corporations. Each organizational form had advantages and disadvantages. This article uses archival data from a private underwriter and a corporation to study how the competition between these different organizational forms was affected by a powerful exogenous shock which substantially increased the risks to American merchant shipping in the late 1790s: the “Quasi-War” between the United States and France.

Economic interests, ideas, and politics have been put forward as explanations for the Repeal of the British Corn Laws. This article evaluates these competing explanations using the case of the Belgian Corn Laws between 1834 and 1873. A detailed quantitative analysis assesses the success of party affiliation and personal and constituency economic interests in predicting representatives' voting behavior. These factors prove to be insufficient to explain the shift towards free trade. This article then moves on to a qualitative analysis, which points to the importance of political strategy and ideas in the liberalization of corn tariffs.

In 1686 the leadership of Massachusetts became involved in the first operational bank scheme in America. In 1688 this note-issuing bank was mysteriously aborted at an advanced stage. I suggest a new, simple explanation for the bank's demise. The bank's notes were supposed to be backed mostly by private land in Massachusetts, but a new royal governor invalidated all the land titles. This episode demonstrates the importance of clearly defined and enforced property rights for the development of financial institutions.

“After showing him an Indian deed for land, he said that their hand was no more worth than a scratch with a bear's paw, undervaluing all my titles, though everyway legal under our former charter government.”1

Joseph Lynde