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American Economic Review Vol. 95 No. 3 2005

The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth

Daron Acemoglu1; Simon Johnson2; James A. Robinson3

1 Department of Economics, Massachusetts Institute of Technology, E52-371, Cambridge, MA 02142. · 2 Sloan School of Management, Massachusetts Institute of Technology, 50 Memorial Drive, Cambridge, MA 02139. · 3 Department of Government, Harvard University, 1875 Cambridge Street, Cambridge, MA 02138.

Abstract

The rise of Western Europe after 1500 is due largely to growth in countries with access to the Atlantic Ocean and with substantial trade with the New World, Africa, and Asia via the Atlantic. This trade and the associated colonialism affected Europe not only directly, but also indirectly by inducing institutional change. Where “initial” political institutions (those established before 1500) placed significant checks on the monarchy, the growth of Atlantic trade strengthened merchant groups by constraining the power of the monarchy, and helped merchants obtain changes in institutions to protect property rights. These changes were central to subsequent economic growth.

DOI
10.1257/0002828054201305
Volume
95
Issue
3
Pages
546-579
Language
en
Sources
crossref bibtex:phds-export.bib openalex

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