Institutional reforms, financial development and sovereign debt: Britain 1690-1790

Nathan Sussman*, Yishay Yafeh

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

102 Scopus citations


We revisit the evidence on the relations between institutions, the cost of government debt, and financial development in Britain (1690-1790) and find that interest rates remained high and volatile for four decades after the Glorious Revolution, partly due to wars and instability; British interest rates co-moved with those in Holland; Debt per capita remained lower in Britain than in Holland until around 1780; and Britain did not borrow at lower rates than European countries with more limited protection of property rights. We conclude that, in the short run, institutional reforms are not rewarded by financial markets.

Original languageAmerican English
Pages (from-to)906-935
Number of pages30
JournalJournal of Economic History
Issue number4
StatePublished - Dec 2006


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