Changes in the Political Economy of State Governments in the Nineteent-Century United States

If the United States is to provide a model for political and economic development in other parts of the world, it is important to have a good historical understanding of the sources of U.S. success. For example, most studies of American political institutions focus on the design of the Constitution. Yet many new nations have adopted constitutions modeled on that of the U.S. with, to say the least, disappointing results. This research project, which is joint with John Wallis of the University of Maryland, focuses on a different institutional transformation that we think is at the core of U.S. political and economic success: the adoption by the states (not the national government) of a set of constitutional revisions in the middle of the nineteenth century that prohibited state legislatures from enacting special charters of incorporation or any kind of special or local law. Before the enactment of these constitutional provisions, the bulk of the business of state legislatures consisted of enacting private bills that specifically benefited one or more individuals or that affected a particular locality. Afterwards, laws had to be general. That is, they had to apply to broad categories of people or localities. We hypothesize that this transformation opened up the economy in ways that made it more competitive and dynamic and that is also made the political system more democratic. For example, those in control of state legislatures could no longer award monopoly privileges to favored supporters. Nor could they prevent opposition groups from adopting the most effective organizational forms and legal tools.

We already know a lot about the timing and content of the state constitutional changes. We have also been working systematically (with the help of previous Tobin RAs) through the states’ session laws with the aim of analyzing the ways in state governments were transformed by these constitutional provisions and how the process of transformation played out over time. The Tobin RAs we hire in this round will continue this work and also move on to study the process of transformation using other state legislative sources and court records.