From royal to parliamentary rule without revolution: The economics of constitutional exchange within divided governments

This paper provides an economic explanation for the tax veto authority of medieval parliament and for the gradual and peaceful shift of policymaking authority from kings to parliaments that occurred in the nineteenth century. The domain of possible power assignments within a divided government is multidimensional and essentially continuous. This allows policymaking authority to be distributed in many ways and also allows constitutional exchange to take place along many margins of power. The consequent internal “market for power” over budgets and public policies allows constitutional and quasi-constitutional reforms to be adopted without threat of civil war or violent revolution. Examples from English history are used to demonstrate the relevance of the analysis.