The rise of Europe : Atlantic trade, institutional change and economic growth PDF
Preview The rise of Europe : Atlantic trade, institutional change and economic growth
MITLIBRARIES 3 9080 02617 8027 *&ASEME IBM 111 I '^mBm iii.'ilili!;!''!'!' m Iflfffll '..;j:,;:.,:;.-.'i--".-'. si mm- Digitized by the Internet Archive in 2011 with funding from Boston Library Consortium Member Libraries http://www.archive.org/details/riseofeuropeatla00acem2 ID28 M414 Sloan School ofManagement Massachusetts Institute ofTechnology (MIT) Working PaperNo. 4269-02 Department ofEconomics Massachusetts Institute ofTechnology (MIT) Working PaperNo. 02-43 The Rise of Europe: Atlantic Trade, Institutional Change and Economic Growth Daron Acemoglu MT; NBER; CEPR Simon H. Johnson MIT; NBER James A. Robinson University ofCalifornia, Berkeley; CEPR This papercan be downloaded without charge from the Social Science ResearchNetwork Electronic PaperCollection at: http://ssrn.com/abstract_id=355880 The Rise of Europe: Atlantic Trade, Institutional Change and Economic Growth* Daron Acemoglu Department of Economics, MIT Simon Johnson Sloan School of Management, MIT James Robinson Departments of Political Science and Economics, Berkeley November 25, 2002 *We thank Thomas Becker and Rui Pedro Esteves for outstanding research assistance and Josh An- grist, Abhijit Banerjee, Dora Costa, Jan de Vries, Stanley Engerman, Philip Hoffman, Peter Lindert, Sebastian Mazzuca, Joe] Mokyr, Larry Neal, Steve Pincus, Christina Romer, David Romer, Andrei Shleifer, Alan Taylor, Hans-Joachim Voth, and seminar participants at Berkeley, the Canadian Insti- tute of Advanced Research, Chicago Business School and Political Science, George Mason University, Harvard Business School, the Harvard Economic History Seminar, the London School of Economics, MIT, the National Bureau of Economic Research economic history, inequality and economic growth groups, New York University and Princeton for comments and suggestions. The Rise of Europe: Atlantic Trade, Institutional Change and Economic Growth Abstract This paper documents that the Rise of (Western) Europe between 1500 and 1850 is largely accounted for by the growth ofEuropean nations with access to the Atlantic, and especially by those nations that engaged in colonialism and long distance oceanic trade. Moreover, Atlantic ports grew much faster than other West European cities, including Mediterranean ports. Atlantic trade and colonialism affected Europe both directly, and indirectly by in- ducing institutional changes. In particular, the growth of New World, African, and Asian trade after 1500 strengthened new segments of the commercial bourgeoisie, and enabled these groups to demand, obtain, and sustain changes in institutions to protect their property rights. Furthermore, the most significant institutional changes and consequently the most substantial economic gains occurred in nations where existing institutions placed some checks on the monarchy and particularly limited its control of overseas trading activ- ities, thus enabling new merchants in these countries to benefit from Atlantic trade. Therefore, the Rise of Europe was largely the result ofcapitalist development driven by the interaction of late medieval institutions and the economic opportunities offered by 'Atlantic trade.'' Keywords: Capitalism, Economic Growth, Institutions, Political Economy, Social Conflict, Trade. JEL Numbers: O10, F10, P10, N13.
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