North's economic history (along with his collaborator Barry Weingast) inspired the modern empirical growth literature on the importance of institutionalized property rights. (The work of Daron Acemoglu and his coauthors exemplifies this literature.)
However, the latest issue of Kyklos features a fascinating article by Luis Angeles: "Institutions, Property Rights, and Economic Development in Historical Perspective". (Here's a gated and ungated link, respectively.) Angeles takes North to task on his history.
Throughout pre-industrial Europe low taxes were the nor given the significant limits on state capacity. England, for instance, was characterized by very low taxes from the thirteenth century until the Glorious Revolution: around 2% or less of national income if we count only the central government and up to 6% [...] if we include the Church. [...] From 1688 onwards we see the government's share in aggregate output increasing to levels never seen before (around 20% of national income by the end of the 18th century). [... Also] English Kings could not expropriate whoever they wanted whenever they wanted, and centuries of law and tradition supported the nobility in their rights to property. Clear evidence of this can be seen in the decision of some of England's most powerful monarchs, such as Elizabeth I or James I, to sell part of their lands in order to finance war efforts.
Angeles notes that the most cited cases of monarchical expropriation, e.g., Henry VIII seizing Roman Catholic Church lands or Edward I's expulsion of the Jews, "the victim was a particular social group that had fallen in disfavor and could not defend itself."
Perhaps more compelling is the harder evidence that Angeles brings to bear against North and Weingast.
North and Weingast's (1989) sole evidence for the improvement in England's institutions after 1688 is the falling rates on public debt. [... But] [i]f anything, falling interest rates on public debt could denote that the state can pay its debts easily by expropriating from its subjects. As it turns out, research has shown that the rates of return on private capital have been quite low in England since the late 14th century [...] and that their slowly decreasing trend suffered no notable alteration following the Glorious Revolution[.]
I found this article intriguing and not because I doubt the importance of property rights (for the industrial revolution or in contemporary settings) in the slightest. Rather, this article made me reconsider the basic historical yarn that I would spin (e.g., during an undergraduate class) in describing Western institutions and the dawn of modern economic growth (largely influenced by authors such as Douglass North). Perhaps some more detailed examination of institutional improvement in the 1700s would be useful.
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