Hostname: page-component-76fb5796d-r6qrq Total loading time: 0 Render date: 2024-04-26T16:50:35.172Z Has data issue: false hasContentIssue false
  • English
  • Français

Public Finance and Economic Growth: The Case of Holland in the Seventeenth Century

Published online by Cambridge University Press:  02 March 2011

Oscar Gelderblom  and
Joost Jonker
Oscar Gelderblom*
Affiliation:
Associate Professors, Department of History, Utrecht University, Drift 10, Utrecht 3512 BS, The Netherlands. E-mail: o.gelderblom@uu.nl.
Joost Jonker*
Affiliation:
Associate Professors, Department of History, Utrecht University, Drift 10, Utrecht 3512 BS, The Netherlands. E-mail: j.jonker@uu.nl.
Get access Rights & Permissions [Opens in a new window]

Abstract

The debate over the institutions that link economic growth to public finance tends to disregard the need for savings to finance growing public debt. In seventeenth-century Holland the structure, size, and issuing rates of the debt were determined by investors' preferences, wealth accumulation, and changing private investment opportunities. The growth of savings enabled the creation of a huge debt largely with short-term bills. Issuing rates dropped because savings outstripped private investment alternatives. In Holland, and probably elsewhere as well, credible commitment and efficient fiscal institutions were necessary, but not sufficient to create liquid secondary markets and low costs of capital.

Type
ARTICLES
Information
The Journal of Economic History , Volume 71 , Issue 1 , March 2011 , pp. 1 - 39
Copyright
Copyright © The Economic History Association 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Altdorfer-Ong, S. “The Canton of Berne as an Investor on the London Capital Market in the Eighteenth Century.” LSE Department of Economic History Working Paper, July 2004.Google Scholar
Altdorfer-Ong, S. “State Investment in Eighteenth-Century Berne.” History of European Ideas 33 (2007) 440–62.CrossRefGoogle Scholar
Boone, M., Davids, K., and Janssens, P.. Urban Public Debts: Urban Government and the Market for Annuities in Western Europe (14th–18th Centuries). Turnhout: Brepols, 2003.CrossRefGoogle Scholar
Bovers, Ralf. “Government-Market Interaction: Holland's Loan Issuing Policy During the Dutch War.” Unpublished MA thesis, Utrecht University 2009.Google Scholar
Braddick, Michael J. The Nerves of State: Taxation and the Financing of the English State, 1558–1714. Manchester: Manchester University Press, 1996.Google Scholar
Brewer, John. The Sinews of Power: War, Money, and the English State, 1688–1783. Cambridge, MA: Harvard University Press, 1989.Google Scholar
Cardoso, José Luís, and Lains, Pedro, eds. Paying for the Liberal State: The Rise of Public Finance in Nineteenth-Century Europe. Cambridge: Cambridge University Press, 2010.CrossRefGoogle Scholar
Carlos, Ann, Neal, Larry, and Wandschneider, Kirsten. “The Origins of National Debt: The Financing and Re-financing of the War of the Spanish Succession.” Unpublished Paper, University of Illinois, 2005.Google Scholar
Carter, Alice. C. “Dutch Foreign Investment, 1738–1800”, Economica XX, New Series (November 1953): 322–40, reprinted in idem, Getting, Spending, and Investing in Early Modern Times. Assen: Van Gorcum, 1975: 23–41.CrossRefGoogle Scholar
City Archives Rotterdam, Oud Rechterlijk Archief (ORA), Rotterdam, The Netherlands.Google Scholar
Clark, Gregory. “The Political Foundations of Modern Economic Growth: Britain, 1540–1800.” Journal of Interdisciplinary History 26, no. 4 (1996): 563–88.CrossRefGoogle Scholar
Dam, Pieter van. Beschryvinge van de Oostindische Compagnie. 7 vols., Stapel, F. W. and baron van Boetzelaer van Asperen en Dubbeldam, C. W. Th., eds. Rijksgeschiedkundige Publicatiën. The Hague: Martinus Nijhoff, 1927–1954.Google Scholar
Dickson, P. G. M. The Financial Revolution in England: A Study in the Development of Public Credit, 1688–1756. London: Macmillan Press, 1967.Google Scholar
Dillen, Johannes G. van. Amsterdam in 1585. Het Kohier der Capitale Impositie van 1585. Amsterdam: J. H. de Bussy 1941.Google Scholar
Dillen, Johannes G. van. Het cohier van de capitale impositie van 1585. Amsterdam: De Bussy, 1941.Google Scholar
Dincecco, Mark. “Fiscal Centralization, Limited Government, and Public Revenues in Europe, 1650–1913.” The Journal of Economic History 69, no. 1 (2009a): 48–103.CrossRefGoogle Scholar
Dincecco, Mark. “Political Regimes and Sovereign Credit Risk in Europe, 1750–1913.” European Review of Economic History 13, no. 1 (2009b): 31–64.CrossRefGoogle Scholar
Dormans, E. H. M. Het tekort, staatsschuld in de tijd der Republiek. Amsterdam: NEHA, 1991.Google Scholar
Drelichman, Mauricio, and Voth, Hans-Joachim. “Debt Sustainability in Historical Perspective: The Role of Fiscal Repression.” Journal of the European Economic Association 6, nos. 2–3 (2008): 657–67.CrossRefGoogle Scholar
Drelichman, Mauricio, and Voth, Hans-Joachim. “Lending to the Borrower from Hell: Debt and Default in the Age of Philip II, 1556–1598” (April 2009). CEPR Discussion Paper No. DP7276. Available at SSRN: http://ssrn.com/abstract=1405073.Google Scholar
Elvin, Mark. “The High-Level Equilibrium Trap: The Causes of the Decline of Invention in the Traditional Chinese Textile Industries.” In Economic Organization in Chinese Society, edited by Willmott, W. E.. 137–72. Stanford, CA: Stanford University Press, 1972.Google Scholar
Engels, Pieter Hendrik. De belastingen en geldmiddelen van den aanvang der Republiek tot op heden. Utrecht: Kemink en Zoon, 1862.Google Scholar
Epstein, Stefan R. Freedom and Growth: The Rise of States and Markets in Europe, 1300–1750. London: Routledge, 2000.CrossRefGoogle Scholar
Fokker, G. A. Geschiedenis der loterijen in de Nederlanden: eene bijdrage tot de kennis van de zeden en gewoonten der Nederlanders in de XVe, XVIe, en XVIIe eeuwen. Amsterdam: Frederik Muller, 1862.Google Scholar
Fritschy, W. “The Poor, the Rich, and the Taxes in Heinsius' Times.” In Anthony Heinsius and the Dutch Republic, 1688–1720, Politics, War, and Finance, edited by de Jongste, Jan A. F. and Veenendaal, Augustus J. Jr., 243–58. The Hague: Institute of Netherlands History, 2002.Google Scholar
Fritschy, W. “A ‘Financial Revolution’ Revisited: Public Finance in Holland During the Dutch Revolt, 1568–1648.” The Economic History Review, New Series 56, no. 1 (2003): 57–89.CrossRefGoogle Scholar
Fritschy, W. “The Efficiency of Taxation in Holland.” In The Political Economy of the Dutch Republic, edited by Gelderblom, Oscar, 55–84. Farnham: Ashgate, 2009.Google Scholar
Gaastra, Femme. De geschiedenis van de VOC. 7th edition. Zutphen: Walburg Pers, 2003.Google Scholar
Gelderblom, Oscar. Zuid-Nederlandse kooplieden en de opkomst van de Amsterdamse stapelmarkt (1578–1630). Hilversum: Verloren, 2000.Google Scholar
Gelderblom, Oscar, and Jonker, Joost. “Completing a Financial Revolution: The Finance of the Dutch East India Trade and the Rise of the Amsterdam Capital Market.” The Journal of Economic History 64, no. 3 (2004): 641–72.CrossRefGoogle Scholar
Gelderblom, Oscar, and Jonker, Joost. “Mirroring Different Follies, the Character of the 1720 Bubble in the Dutch Republic.” In “The Great Mirror of Folly”: Finance, Culture, and the Crash of 1720, edited by Goetzmann, William N., Geert Rouwenhorst, K., and Young, Timothy. New Haven, CT: Yale University Press, forthcoming.Google Scholar
Gouda Archives, Oud-Rechterlijk Archief, Streekarchief Midden-Holland, Gouda, The Netherlands.Google Scholar
Grossmann, J. Die Amsterdamer Börse vor zweihundert Jahren. The Hague: Nijhoff, 1876.CrossRefGoogle Scholar
Hart, Marjolein't, The Making of a Bourgeois State, War, Politics, and Finance During the Dutch Revolt. Manchester: Manchester University Press, 1993.Google Scholar
Hart, Marjolein't, “The Merits of a Financial Revolution: Public Finance, 1550–1700.” In A Financial History of the Netherlands, edited by 't Hart, Marjolein, Jonker, Joost, and van Zanden, Jan Luiten, 11–36. Cambridge: Cambridge University Press, 1997.CrossRefGoogle Scholar
Hart, Marjolein't, “Mutual Advantages: State Bankers as Brokers Between the City of Amsterdam and the Dutch Republic.” In The Political Economy of the Dutch Republic, edited by Gelderblom, Oscar, 115–42. Farnham: Ashgate, 2009.Google Scholar
Hart, Marjolein't, and van den Burg, Martijn. “Renteniers and the Recovery of Amsterdam's Credit (1578–1605).” In Urban Public Debts: Urban Government and the Market for Annuities in Western Europe (14th–18th Centuries), edited by Boone, Marc, Davids, Karel, and Janssens, Paul, 197–218. Turnhout: Brepols, 2003.Google Scholar
Hecht, Felix. Ein Beitrag zur Geschichte der Inhaberpapiere in den Niederlanden. Erlangen: Enke, 1869.Google Scholar
Heijden, Manon van der. Geldschieters van de stad. Financiale relaties tussen stad, burgers en overheden 1550–1650. Amsterdam: Bert Bakker, 2006.Google Scholar
Helvetius, Adrianus Engelhard. “Mémoire sur l'état présent du gouvernement des Provinces Unies. In The Low Countries in Early Modern Times: Selected Documents, edited by Rowen, Herbert H., 226–32. London/Melbourne: Macmillan, 1972 [1706].Google Scholar
Hoekstra, M. “Necessity is the Mother of Invention, the Lottery Loans of Holland During the War of the Spanish Succession.” Unpublished MA thesis, Utrecht University, June 2010.Google Scholar
Hoffman, Philip T., and Norberg, Kathryn. “Introduction.” In Fiscal Crises, Liberty, and Representative Government, edited by Hoffman, Philip T. and Norberg, Kathryn, 1–5. Stanford, CA: Stanford University Press, 1994.CrossRefGoogle Scholar
Homer, Sidney, and Sylla, Richard. A History of Interest Rates. 3rd edition. New Brunswick/London: Rutgers University Press, 1991.Google Scholar
Hop, Cornelis, and Vivien, Nicolaas. Notulen gehouden ter Staten-Vergadering van Holland (1671–1675). Amsterdam: Müller 1903.Google Scholar
Houtzager, Dirk. Hollands lijf- en losrenteleningen vóór 1672. Schiedam: Roelants, 1950.Google Scholar
Huysman, E. C. M., et al. ., ed., Particuliere notulen van de vergaderingen der Staten van Holland, 1620–1640 door N. Stellingwerff en S. Schot, Rijksgeschiedkundige Publicatiën, The Hague: Martinus Nijhoff, 1987 (SH).Google Scholar
Japikse, N., ed., Notulen gehouden ter Staten-Vergadering van Holland (1671–1675) door Cornelis Hop, pensionaris van Amsterdam en Nicolaas Vivien, pensionaris van Dordrecht. Amsterdam: Johannes Müller, 1903 (NSV).Google Scholar
Klein, Peter Wolfgang. De Trippen in de 17e eeuw: een studie over het ondernemersgedrag op de Hollandse stapelmarkt. Assen: Van Gorcum, 1965.Google Scholar
Leyden City Archives, Oud Rechterlijk Archief (ORA). Leyden, The Netherlands.Google Scholar
Liesker, Ruud, and Fritschy, Wantje. Gewestelijke Financiën ten tijde van de Republiek der Verenigde Nederlanden. Deel IV Holland (1572–1795). The Hague: Instituut voor Nederlandse Geschiedenis, 2004.Google Scholar
Memorie…van het geene omtrent het stuk van de finatie van de provincie van Holland…isvoorgevallen… 1755,' available at the following website: http://www.inghist.nl/Onderzoek/Projecten/GewestelijkeFinancien/memorie, (Memorie 1755).Google Scholar
de Muinck, B. E.. Een regentenhuishouding omstreeks 1700. Gegevens uit de prive-boekhouding van Mr. Cornelis de Jonge van Ellemeet, Ontvanger-Generaal der Verenigde Nederlanden (1646–1721). The Hague: Martinus Nijhoff, 1965.Google Scholar
Murphy, Anne L. The Origins of English Financial Markets, Investment, and Speculation Before the South Sea Bubble. Cambridge: Cambridge University Press, 2009.Google Scholar
National Archives, Generaale Index op Resoluties Staten van Holland (RSH).Google Scholar
National Archives, The Hague, The Netherlands (NA).Google Scholar
Neal, Larry. The Rise of Financial Capital Markets in the Age of Reason. Cambridge: Cambridge University Press, 1990.Google Scholar
Neal, Larry. “How It All Began: The Monetary and Financial Architecture of Europe During the First Global Capital Markets, 1648–1815.” Financial History Review 7 (2000): 117–40.CrossRefGoogle Scholar
North, Douglass C., and Weingast, Barry R.. “Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England.” The Journal of Economic History 49, no. 4 (1989): 803–32.CrossRefGoogle Scholar
O'Brien, Patrick K. “Fiscal Exceptionalism: Great Britain and Its European Rivals: From Civil War to Triumph at Trafalgar and Waterloo.” Working Paper Department of Economic History, London School of Economics, 2001.Google Scholar
Panhuysen, Luc. Rampjaar 1672. Hoe de Republiek aan de ondergang ontsnapte. Amsterdam/Antwerpen: Atlas, 2009.Google Scholar
Prak, Maarten. The Dutch Republic in the Seventeenth Century, The Golden Age. Cambridge: Cambridge University Press, 2005.CrossRefGoogle Scholar
Prak, Maarten, and van Zanden, Jan Luiten. “Towards an Economic Interpretation of Citizenship: The Dutch Republic Between Medieval Communes and Modern Nation-States.” European Review of Economic History 10, no. 2 (2006): 111–46.Google Scholar
Prak, Maarten, and Luiten van Zanden, Jan.) “Tax Morale and Citizenship in the Dutch Republic.” In The Political Economy of the Dutch Republic, edited by Gelderblom, Oscar, 143–66. Farnham: Ashgate, 2009.Google Scholar
Quinn, Stephen. “The Glorious Revolution's Effect on British Private Finance: A Microhistory, 1680–1705.” The Journal of Economic History 61, no. 3 (2001): 593–615.Google Scholar
Quinn, Stephen. “Securitization of Sovereign Debt: Corporations as a Sovereign Debt Restructuring Mechanism in Britain, 1694–1750” (March 2008). Available at SSRN: http://ssrn.com/abstract=991941.CrossRefGoogle Scholar
Schalk, R. “Financing the Dutch Golden Age: The Credit Market of Enkhuizen, 1580–1700.” Unpublished MA thesis, Utrecht University, June 2010.Google Scholar
Soltow, Lee, and Luiten van Zanden, Jan. Income and Wealth Inequality in the Netherlands, 16th–20th century. Amsterdam: Het Spinhuis, 1998.Google Scholar
Stadsarchief Amsterdam, The Netherlands (ACA).Google Scholar
Stasavage, David. Public Debt and the Birth of the Democratic State. Cambridge: Cambridge University Press, 2003.CrossRefGoogle Scholar
Stasavage, David. “Cities, Constitutions, and Sovereign Borrowing in Europe, 1274–1785.” International Organization 61 (2007a): 489–525.CrossRefGoogle Scholar
Stasavage, David. “Partisan Politics and Public Debt: The Importance of the ‘Whig Supremacy’ for Britain's Financial Revolution.” European Review of Economic History 11 (2007b): 123–53.CrossRefGoogle Scholar
Sussman, Nathan, and Yafeh, Yishay. “Institutional Reforms, Financial Development, and Sovereign Debt: Britain, 1690–1790.” The Journal of Economic History 66, no. 4 (2006): 906–35.CrossRefGoogle Scholar
Sylla, Richard. “Financial Systems and Economic Modernization.” The Journal of Economic History 62, no. 2 (2002): 277–92.CrossRefGoogle Scholar
Temin, Peter, and Voth, Joachim. “Credit Rationing and Crowding Out During the Industrial Revolution: Evidence from Hoare's Bank, 1702–1862.” Explorations in Economic History 42 (2005): 325–48.CrossRefGoogle Scholar
Tilly, Charles. Coercion, Capital, and European States, AD 990–1990. Cambridge: Cambridge University Press, 1990.Google Scholar
Tracy, James D. The Financial Revolution in the Habsburg Netherlands: “Renten” and “Renteniers” in the County of Holland, 1515–1565. Berkeley: University of California Press, 1985a.CrossRefGoogle Scholar
Tracy, James D. “The Taxation System of the County of Holland During the Reigns of Charles V and Philip II, 1519–1566.” Economisch- en Sociaal-Historisch Jaarboek 48 (1985b): 71–117.Google Scholar
Tracy, James D. “Emigré and Ecclesiastical Property as the Sheet-Anchor of Holland Finance, 1572–1584.” In Reformation, Revolt, and Civil War in France and the Netherlands, 1555–1585, edited by Benedict, Philip, Marnef, Guido, van Nierop, Henk, and Venard, Marc, 255–66. Amsterdam: KNAW, 1999.Google Scholar
Tracy, James D. “Keeping the Wheels of War Turning.” In The Origins and Development of the Dutch Revolt, edited by Darby, Graham, 133–50. London/New York: Routledge, 2001.CrossRefGoogle Scholar
Tracy, James D. Emperor Charles V, Impresario of War: Campaign Strategy, International Finance, and Domestic Politics. Cambridge: Cambridge University Press, 2002.Google Scholar
Tracy, James D. The Founding of the Dutch Republic: War, Finance, and Politics in Holland, 1572–1588. Oxford: Oxford University Press, 2007.Google Scholar
Veenendaal, A. J. “Fiscal Crises and Constitutional Freedom in the Netherlands, 1450–1795.” In Fiscal Crises, Liberty, and Representative Government, edited by Hoffman, Philip T. and Norberg, Kathryn, 96–139. Stanford, CA: Stanford University Press, 1994.CrossRefGoogle Scholar
Velde, Francois, and Weir, David. “The Financial Market and Government Debt Policy in France, 1746–1793.” The Journal of Economic History 52, no. 1 (1992): 1–39.CrossRefGoogle Scholar
Vries, Jan de, and Van der Woude, Ad. The First Modern Economy: Success, Failure, and Perseverance of the Dutch Economy, 1500–1815. Cambridge: Cambridge University Press, 1997.CrossRefGoogle Scholar
Zanden, Jan Luiten van. “Economic Growth in the Golden Age: The Development of the Economy of Holland, 1500–1650.” In The Dutch Economy in the Golden Age, edited by Davids, Karel (C. A.) and Noordegraaf, Leo, 5–26. Amsterdam: NEHA, 1993.Google Scholar
Zandvliet, Kees. De 250 rijksten van de Gouden Eeuw. Amsterdam: Rijksmuseum Publishing, 2006.Google Scholar
Zuijderduijn, Jaco (C. J.). Medieval Capital Markets, Markets for Renten, State Formation and Private Investment in Holland (1300–1550). Leiden: Brill, 2009.Google Scholar
Zuijderduijn, Jaco (C. J.). “The Emergence of Provincial Debt in the County of Holland (Thirteenth–Sixteenth Centuries).” European Review of Economic History 14 (2010): 335–59.CrossRefGoogle Scholar