Symbolic unity, dynastic continuity, and countervailing power: Monarchies, republics, and the economy

Abstract

We investigate the implications of the persistence of traditional patterns of state organization by examining the relationship between property rights and the economy for monarchies and republics. We argue that, relative to republics, monarchies protect property rights to a greater extent by reducing the negative effects of internal conflict, executive tenure, and executive discretion. In turn, a better protection of property rights results in greater standards of living. Using panel data on 137 countries between 1900 and 2010, we formulate and test a model with endogenous variables. We find strong evidence that monarchies contribute to a greater protection of property rights and higher standards of living through each of the three theoretical mechanisms compared to all republics. We also find that democraticconstitutional monarchies perform better than non-democratic and absolute monarchies when it comes to offsetting the negative effects of the tenure and discretion of the executive branch. We discuss the implications of the persistence of traditional patterns of political authority and rule for political sociology and economic sociology.