4 - From Incentives to Institutions: Contractual Imperialism in Practice

Summary

How did colonies develop under contractual imperialism? This chapter reviews three important cases – Virginia, Massachusetts Bay, and Barbados – and argues that contractual imperialism had important successes. Under contractual imperialism, colonizers did search vigorously for resource endowments, and made and re-made their economies at significant cost to exploit them. Patent terms for balanced colonial polities did restrain some of the excesses of colonial government under their founding elites. At the same time, experience revealed important problems with contractual imperialism: It was not effective at coordinating an empire of multiple colonies, and it provided such strong incentives that it generated significant factional disputes within colonies. Nevertheless, under contractual imperialism, English colonies established successful cash-crop economies.