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How Did Britain Democratize? Views from the Sovereign Bond Market

Published online by Cambridge University Press:  13 March 2015

Aditya Dasgupta  and
Daniel Ziblatt
Aditya Dasgupta
Affiliation:
Ph.D. candidate, Department of Government, Harvard University, 1737 Cambridge Street, Cambridge, MA, 02138. E-mail: dasgupta@fas.harvard.edu.
Daniel Ziblatt
Affiliation:
Professor of Government, Department of Government, Harvard University, 27 Kirkland Street, Cambridge, MA, 02138. E-mail: dziblatt@gov.harvard.edu.
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Abstract

To assess competing theories of democratization, we analyze British sovereign bond market responses to the 1832, 1867, and 1884 Reform Acts, and to two failed Chartist agitations for reform. Analyses of high-frequency 3 percent consol yield data and historical financial press suggest three conclusions. First, democratic reform episodes were preceded by increases in perceived political risk, comparable to democratizing episodes in other countries. Second, both democratic reform and repression were followed by yield declines. Third, the source of political risk in Britain was both social unrest and political deadlock. Together, the findings challenge the “Whig” characterization of British democratization as exceptionally risk-free.

Type
Articles
Information
The Journal of Economic History , Volume 75 , Issue 1 , March 2015 , pp. 1 - 29
Copyright
Copyright © The Economic History Association 2015 

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Footnotes

We thank James Alt, David Art, Ann Carlos, Jeff Frieden, Noam Gidron, Alexander Kuo, James Robinson, Jean-Laurent Rosenthal, three anonymous reviewers, and seminar participants at Harvard, the Juan March Institute, UCLA, and Yale for comments, and Robert Brown and Stephen Easton for sharing data. All errors are our own.

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