Deregulation despite transitional gains: The brewers guild of Cologne 1461

Research output: Contribution to journalArticle

9 Scopus citations

Abstract

Acemoglu and Robinson (in The American Economic Review 90(2):126-130, 2000) argue that historically economic rents have been less of a barrier to regulatory reform and innovation than political rents. Contrary to this conclusion, I argue that the important margin of distinction for factors preventing deregulation is not whether rents are economic or political, but rather what alternative profit opportunities are available and how innovation has changed the entrepreneurial opportunity set. Using the example of medieval Cologne, I show that the transitional gains trap framework, as developed by Tullock (in The Bell Journal of Economics 6(2):671-678, 1975), applies in a static environment and can successfully prevent reform over long periods of time, but that neither political nor economic entrepreneurs will ignore an opportunity for increased profitability in the long run. In addition, the organization of the political unit to which the regulation applies can determine the persistence of said regulation.

Original languageEnglish (US)
Pages (from-to)329-340
Number of pages12
JournalPublic Choice
Volume140
Issue number3-4
DOIs
StatePublished - Jun 8 2009
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Sociology and Political Science
  • Economics and Econometrics

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