Institutional change and property rights prior to the Industrial Revolution: The case of wardship in Britain, 1485-1660

This blog is based on research funded by a bursary from the Economic History Society

by Sean Bottomley (Northumbria University)

Henry VII on his death bed. Available at <https://www.bl.uk/collection-items/henry-vii-on-his-deathbed&gt;

Under the influence of institutional economics, a consensus has emerged on the importance of the balanced state: one that is strong enough to fund and provide a legal framework enabling market exchange and security from internal and external predation, but which is constrained from undermining the security of private property rights. The formative example is England, where it is claimed that a balanced state emerged after the Glorious Revolution, leading in turn to the Industrial Revolution (North and Weingast 1989, Acemoglu and Robinson 2012).

This account, though, is controversial. It is widely accepted that property rights (certainly in land) have been secure since at least 1540 (Clark 1996). It is in this context that my project examines royal wardship in Britain from 1485 to 1660, a topic that has been largely neglected by historians since the 1950s (Bell 1953, Hurstfield 1958), and has never been the subject of an economic history. Beginning with Henry VII, the English Crown strained to re-establish its archaic, prerogative rights to ‘wardship’. These included the right to take temporary proprietorship of freehold lands held of it by certain feudal-military tenures which had descended to an underage heritor (the ward) upon the death of their ancestor. It also included the right to take physical custody of the ward until they reached the age of majority and, when they were unwed, to decide who they would marry.

Three main points have emerged from the project so far. Firstly, the Crown’s re-imposition of wardship served to undermine property rights. Most commonly, the Crown sold wards and their lands on to third parties, acting as guardians. Guardians seldom had any incentive to take care of the estate, rather woods were chopped down, lands were over-cropped, and buildings torn down for materials. It is partly in this context that Blackstone’s assessment of the Tenures Abolition Act (1660), which abolished wardship and the feudal-military tenures which underpinned it, as the ‘great[est] acquisition to the civil property of this kingdom than even Magna Carta’ can be understood. Secondly, the incidence of wardship was such that it had tangible economic consequences. For instance, land held by feudal-military tenures sold at a 10 percent discount relative to those tenures that did not entail wardship (socage) – significant in what was still a predominantly agrarian economy and where land was the pre-eminent asset and store of value. Thirdly, wardship is indicative of wider systemic failings of the early modern English state. It might have been an immensely productive source of revenue, but due to maladministration and the malfeasance of its officers, only a very small proportion of potential revenues actually accrued to the Crown.

Tentatively, wardship and its eventual abolition supports the argument that constitutional changes during the seventeenth century did augur a demonstrable improvement in state capacity and the security of property rights. However, critical components of the project remain unfinished. In particular, contemporaries often claimed that the Crown was purposely distorting the content and institutions of the land law in order to increase its income from wardships. Investigation of contemporary legal sources will allow me to determine the accuracy of this claim.  These sources may also be useful for examining related issues, especially whether the complexities of tenure impeded land conveyancing (significant given the demonstrable importance of transaction costs for productivity and land usage) and large-scale land improvements (particularly in land drainage).

Another unfinished component of my project is archival research on  wardship in Ireland and Scotland.  This is not conceived as merely an adjunct to the project for England:  the inability of the Crown to raise funds from wardship was systemic in each of the three Stuart kingdoms, and  a comparative approach should yield more meaningful explanations why this state of affairs existed.   Work at the National Archives of Scotland will also serve a secondary purpose. Unlike in England or Ireland, the tenurial framework underpinning wardship was abolished at a significantly later date (1747) and there was a continuously updated register of land conveyances, the Register of Sasins. The intention is to explore whether the Register can be used to measure any changes in land values and/or usage coincident with the abolition of feudal-military tenures in Scotland.

To contact the author: sean.bottomley@northumbria.ac.uk

References:

Acemoğlu, Daron, and James A. Robinson. Why Nations Fail: The origins of power, prosperity and poverty. London: Profile Books, 2012.

Bell, H. E., An Introduction to the History and Records of the Court of Wards and Liveries. Cambridge:Cambridge University Press, 1953.

Clark, Gregory. “The political foundations of Modern Economic Growth, 1540-1800,” Journal of Interdisciplinary History 26, no. 4 (1996): 563-588.

Hurstfield, Joel, The Queen’s Wards: Wardship and Marriage under Elizabeth I. Cambridge, Mass: Harvard University Press, 1958.

North, Douglass and Barry Weingast. “Constitutions and commitment: the evolution of

institutions governing public choice in seventeenth century England.” Journal of Economic History 49, no. 2 (1989): 803-832

The Origins of Political and Property Rights in Bronze Age Mesopotamia

by Giacomo Benati, Carmine Guerriero, Federico Zaina (University of Bologna)

The full paper from this blog is available here

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Mesopotamian map of canals. Available at <http://factsanddetails.com/world/cat56/sub363/item1513.html&gt;

Despite the overwhelming empirical evidence documenting the relevance of inclusive political institutions and strong property rights, we still lack a unified framework identifying their determinants and their interaction. We develop a model to address this deficiency, and we test its implications on a novel data on Greater Mesopotamia during the Bronze Ages.

This region developed the first recorded forms of stable state institutions, which can be credibly linked to geography. Worsening  climatic conditions between the end of the Uruk period (3300-3100 BC) and the beginning of the Jemdet Nasr and Early Dynastic periods (3100-2550 BC) reduced farming returns and  forced the religious elites to share power previously acquired from the landholding households, with rising military elites. This transformation led to the peasants engaging in leasing, renting and tenure-for-service contracts requiring rents and corvèe, such as participation in infrastructure projects and a conscripted army. Being an empowerment mechanism, the latter was the citizens’ preferred public good. Second, the Pre-Sargonic period (2550-2350 BC) witnessed a milder climate, which curbed the temple and palatial elites’ need to share their policy-making power. Finally, a period of harsher climate, and the consequent rise of long-distance trade as an alternative activity, allowed the town elites to establish themselves as the third decision-maker during the Mesopotamian empires period (2350-1750 BC). Reforms towards more inclusive political institutions were accompanied by a shift towards stronger farmers’ rights on land and a larger provision of public goods, especially those most valued by the citizens, i.e., conscripted army.

To elucidate the incentives behind these stylized facts, we consider the interaction between a land-owning elite and citizens able to deliver a valuable harvest if the imperfectly observable farming conditions were favorable. To incentivize investment, the elite cannot commit to direct transfers, but can lean on two other instruments: establishing a more inclusive political process, which allows citizens to select tax rates and organize public good provision, and/or punishing citizens for suspected shirking by restricting their private rights.  This ‘stick’ is costly for the elite. When the expected harvest value is barely greater than the investment cost, citizens cooperate only under full property rights and more inclusive political institutions, allowing them to fully tax the output. When the investment return is intermediate, the elite keeps control over fiscal policies and can implement partial taxation. When, finally, the investment return is large, the elite can also weaken the protection of private rights. Yet, embracing the stick is optimal only if production is sufficiently transparent, and, thus, punishment effectively disciplines a shirking citizen. Our model has three implications. First, the inclusiveness of political institutions declines with expected farming returns and is unrelated to the opaqueness of farming. Second, the strength of property rights diminishes with the expected harvest return and is positively related to the opaqueness of farming. Finally, citizens’ expected utility from public good provision increases with the strength of political and property rights.

To evaluate these predictions, we study 44 major Mesopotamian polities observed between 3050 and 1750 BC. To proxy the expected farming return, we combine information on the growing season temperature, averaged—as any other non-institutional variable—over the previous half-century and land suitability for wheat, barley and olive breeding (Figure 1). This measure is strongly correlated with contemporaneous barley yields in l/ha. Turning to the opaqueness in the farming process, we consider the exogenous spread of viticulture through inter-palatial trade. Because of its diplomatic and ritual roles, wine represented one of the exports most valued by the ruling elites. Regarding common interest goods, we gather information on the number of public and ritual buildings and the existence of a conscripted army. To measure the strength of political and property rights, we construct a five-point score rising with the division of decision-making power and a six-point index increasing when land exploitation by the elite was indirect rather than direct and/or farmers’ rights were enforced de jure rather than de facto. These two variables build on the events in a 40-year window around each time period.

Conditional on polity and half-century fixed effects, our OLS estimates imply that the strength of political and property rights is significantly and inversely related to the expected farming return, whereas only the protection of private property is significantly and positively driven by the opaqueness of farming. Finally, public good provision is unrelated to property rights protection but significantly and positively linked to the inclusiveness of the political process, and more so when the public good was the setup of a conscripted army.

These results open three crucial avenues for further research. First, did reforms towards stronger political and property rights foster, thanks to the larger provision of public goods, economic development (Guerriero and Righi, 2019)? Second, did the most politically developed polities obstruct the market integration of the Mesopotamia empires, pushing the rulers to impose a complex bureaucracy on all of them and extractive policies on the less militarily relevant ones (de Oliveira and Guerriero, 2018; Guerriero, 2019a)? Finally, did reforms towards a more inclusive political process foster the centralization of the legal order, i.e., reforms towards statutory law, bright-line procedural rules and a strong protection of the potential buyers’ reliance on their contracts (Guerriero 2016; 2019b)?

Picture 1
Figure 1: Political and Property Rights, Public Good Provision and Farming Return.        Source: as per published paper

 

References

de Oliveira, Guilherme, and Carmine Guerriero. 2018. “Extractive States: The Case of the Italian Unification.” International Review of Law and Economics, 56: 142-159.

Guerriero, Carmine. 2016. “Endogenous Legal Traditions.” International Review of Law and Economics, 46: 49-69.

Guerriero, Carmine. 2019a. “Endogenous Institutions and Economic Outcomes.” Forthcoming, Economica.

Guerriero, Carmine. 2019b. “Property Rights, Transaction Costs, and the Limits of the Market.” Unpublished.

Guerriero, Carmine, and Laura Righi. 2019. “The Origins of the State’s Fiscal Capacity: Culture, Democracy, and Warfare.” Unpublished.

North, Douglass C., and Barry R. Weingast. 1989. “Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England.” Journal of Economic History, 49: 803-832.

 

To contact the authors

Giacomo Benati (giacomo.benati2@unibo.it)

Carmine Guerriero (c.guerriero@unibo.it)

Federico Zaina (Federico.zaina@unibo.it)

A Policy of Credit Disruption: The Punjab Land Alienation Act of 1900

by Latika Chaudhary (Naval Postgraduate School) and Anand V. Swamy (Williams College)

This research is due to be published in the Economic History Review and is currently available on Early View.

 

Agriculture_in_Punjab_India
Farming, farms, crops, agriculture in North India. Available at Wikimedia Commons.

In the late 19th century the British-Indian government (the Raj) became preoccupied with default on debt and the consequent transfer of land in rural India. In many regions Raj officials made the following argument: British rule had created or clarified individual property rights in land, which had for the first time made land available as collateral for debt. Consequently, peasants could now borrow up to the full value of their land. The Raj had also replaced informal village-based forms of dispute resolution with a formal legal system operating outside the village, which favored the lender over the borrower. Peasants were spendthrift and naïve, and unable to negotiate the new formal courts created by British rule, whereas lenders were predatory and legally savvy. Borrowers were frequently defaulting, and land was rapidly passing from long-standing resident peasants to professional moneylenders who were often either immigrant, of another religion, or sometimes both.  This would lead to social unrest and threaten British rule. To preserve British rule it was essential that one of the links in the chain be broken, even if this meant abandoning cherished notions of sanctity of property and contract.

The Punjab Land Alienation Act (PLAA) of 1900 was the most ambitious policy intervention motivated by this thinking. It sought to prevent professional moneylenders from acquiring the property of traditional landowners. To this end it banned, except under some conditions, the permanent transfer of land from an owner belonging to an ‘agricultural tribe’ to a buyer or creditor who was not from this tribe. Moreover, a lender who was not from an agricultural tribe could no longer seize the land of a defaulting debtor who was from an agricultural tribe.

The PLAA made direct restrictions on the transfer of land a respectable part of the policy apparatus of the Raj and its influence persists to the present-day. There is a substantial literature on the emergence of the PLAA, yet there is no econometric work on two basic questions regarding its impact. First, did the PLAA reduce the availability of mortgage-backed credit? Or were borrowers and lenders able to use various devices to evade the Act, thereby neutralizing it?  Second, if less credit was available, what were the effects on agricultural outcomes and productivity? We use panel data methods to address these questions, for the first time, so far as we know.

Our work provides evidence regarding an unusual policy experiment that is relevant to a hypothesis of broad interest. It is often argued that ‘clean titling’ of assets can facilitate their use as collateral, increasing access to credit, leading to more investment and faster growth. Informed by this hypothesis, many studies estimate the effects of titling on credit and other outcomes, but they usually pertain to making assets more usable as collateral. The PLAA went in the opposite direction – it reduced the “collateralizability” of land which should have  reduced investment and growth, based on the argument we have described. We investigate whether it did.

To identify the effects of the PLAA, we assembled a panel dataset on 25 districts in Punjab from 1890 to 1910. Our dataset contains information on mortgages and sales of land, economic outcomes, such as acreage and ownership of cattle, and control variables like rainfall and population. Because the PLAA targeted professional moneylenders, it should have reduced mortgage-backed credit more in places where they were bigger players in the credit market. Hence, we interact a measure of the importance of the professional, that is, non-agricultural, moneylenders in the mortgage market with an indicator variable for the introduction of the PLAA, which takes the value of  1 from 1900 onward. As expected, we find that  that the PLAA contracted credit more in places where professional moneylenders played a larger role – compared to  districts with no professional moneylenders.  The PLAA reduced mortgage-backed credit by 48 percentage points more at the 25th percentile of our measure of moneylender-importance and by 61 percentage points more at the 75th percentile.

However, this decrease of mortgage-backed credit in professional moneylender-dominated areas did not lead to lower acreage or less ownership of cattle. In short, the PLAA affected credit markets as we might expect without undermining agricultural productivity. Because we have panel data, we are able to account for potential confounding factors such as time-invariant unobserved differences across districts (using district fixed effects), common district-specific shocks (using year effects) and the possibility that districts were trending differently independent of the PLAA (using district-specific time trends).

British officials provided a plausible explanation for the non-impact of PLAA on agricultural production: lenders had merely become more judicious – they were still willing to lend for productive activity, but not for ‘extravagant’ expenditures, such as social ceremonies.  There may be a general lesson here:  policies that make it harder for lenders to recover money may have the beneficial effect of encouraging due diligence.

 

 

To contact the authors:

lhartman@nps.edu

aswamy@williams.edu

Landlords and tenants in Britain, 1440-1660

review by James P. Bowen (University of Liverpool)

book edited by Jane Whittle

‘Landlords and tenanta in Britain, 1440-1660’ is published by Boydell and Brewer. SAVE  25% when you order direct from the publisher – offer ends on the 15th August 2019. See below for details.

 

9781843838500_1

This book, the first volume in the Economic History Society’s ‘People, Markets, Goods: Economies and Societies in History’ paperback series, revisits Tawney’s classic work, The Agrarian Problem in the Sixteenth Century, published in 1912. It arises from a conference held to mark the centenary of the book’s publication and includes the leading figures in rural and agrarian history showcasing the latest research on issues originally discussed by Tawney. The book is logically structured. Keith Wrightson’s foreword provides personal insight as to attitudes amongst Cambridge economic historians who maligned Tawney. The first three chapters offer overviews beginning with Jane Whittle’s historiographical essay concerning Tawney, providing background to his Agrarian Problem. Christopher Dyer surveys the fifteenth century, given Tawney’s view that demographic changes were key in creating change in fifteenth-century England, providing the conditions for the ‘problem’ of the sixteenth century. Harold Garrett-Goodyear addresses the issues surrounding copyhold tenure and the institutional function of manor courts in promoting lords’ private interests as landowners and how this was reflected in economic and social change with the emergence of agrarian capitalism, greater social differentiation and the transition from feudal to modern society.

The remaining chapters are thematic, several of which are detailed local or micro-studies. Briony McDonagh and Heather Falvey explore the enclosure process at a local level. Complementing the rural viewpoint, Andy Wood shows how notions of custom and popular memory were prominent in urban society below the ‘middling sort’, specifically weavers of Malmesbury, Wiltshire, a cloth-working town. Whilst there is an apparent lack of evidence for Tawney’s sense of ‘ideal customary’, he suggests this does not undermine his view, conversely reinforcing his argument about the centrality of custom in popular political culture and disputes arising because of struggles over customary entitlement and urban identity. Providing a comparative dimension Julian Goodare searches for a Scottish agrarian problem, pointing out that whilst the two countries had different legal and political systems, similar processes seem to have been at play, suggesting a common economic problem rather than law or political structures.

Several chapters address the issue of tenure, Tawney having pointed to the insecurity of leasehold tenure and the increasing commercial landlord policies as being central to the agrarian problems of the sixteenth century. Jean Morrin examines a landlord-tenant dispute on the Durham Cathedral Estate over the abolition of traditional customary tenures, specifically tenant-right. She argues for a more subtle approach to leases in the early modern period given the various forms which they took, presenting a picture of negotiation and compromise, which not only encouraged tenants to improve farms, but also granted them the right to bequeath, sell or mortgage their leases to whomever they chose. Jennifer Holt explores the case of the Hornby Castle Estate in north Lancashire, analyzing the potential income from customary land and quantifying the shares of lords and tenants, demonstrating how manorial tenants benefitted despite the lord’s attempt to raise rents and fines, retaining their tenures on a customary basis.

Chapters by Bill Shannon and Elizabeth Griffiths look at landlord-driven agrarian improvement intended to raise revenue. Christopher Brooks considers the legal and political context, in particular the impact of the Civil Wars and Interregnum, highlighting the complexities which weakened Tawney’s assessment of the mid- and later seventeenth century. He highlights the common laws engagement with customary tenures by 1640, arguing that greater security afforded to smallholders enabled them to assert their rights more aggressively, with patriarchal and seigniorial landlord-tenant relationships being replaced by economic relations. Legal developments meant common law served the interests of ‘middling’ agricultural society and the gentry and that by the 1680s, land, including copyhold, had been absorbed into the market for both property and credit. Finally, David Ormrod reflects on the significance of Tawney’s work in relation to long-standing theoretical debates regarding the rise of capitalism and the transition from feudalism to capitalism.

Whittle’s short conclusion effectively synthesizes the chapters, showing that debates have progressed since Tawney’s work not least with regard to the newer approaches towards political, social and rural history. Emphasis is placed on the ‘blurred boundaries’ which existed, leading to disputes notably over enclosure and tenure. Developments in England are viewed in a wider western European perspective, with reference to up-to-date research and future questions identified. The chapters form a coherent volume which, as the title suggests, focuses on the changing relationship between landlords and tenants, a well-established trend in agrarian historiography. Moreover, while it is recognized that any notion of a sixteenth-century agrarian revolution has been rejected, it nevertheless rightly argued that Tawney’s Agrarian Problem, ‘remains a crucial reference point’, containing much to, ‘inform and inspire the twenty-first-century historian seeking to understand the changes that took place in rural England between 1440 and 1660’ (pp. 17-18).

 

SAVE 25% when you order direct from the publisher using the offer code B125 online hereOffer ends 15th August 2019. Discount applies to print and eBook editions. Alternatively call Boydell’s distributor, Wiley, on 01243 843 291, and quote the same code. Any queries please email marketing@boydell.co.uk

 

Note: this post appeared as a book review article in the Review. We have obtained the necessary permissions.