Medieval Institutions: The Roots of the Modern Liberal Democracy
MEDIEVAL INSTITUTIONS: THE ROOTS OF THE MODERN LIBERAL DEMOCRACY
Ivan Alexandrovich Pidorenko
PhD student, Corvinus University of Budapest,
Hungary, Budapest
In some areas of both Western and Eastern Europe proto institutions of modern liberal and representative democracy had emerged and had been evolving since the medieval era. Originally, they mainly existed in the form of assemblies of different complexity, had various functions and were aimed to mitigate the tensions between the executives and the society. To what extent do they relate to the modern institutions of democracy, via which channels and why is it important to know?
Most of the studies point on the positive relationship between the degree of democracy and economic growth, and if indigenous institutions are indeed important determinants of the modern ones, then they have an indirect impact on the dynamics of growth as well, via the effect on the modern institutions of democracy. And if so, are the countries, which were pioneers and have applied the democratic practices since medieval era, today richer than the others?
Firstly, let us consider the proto institutions of democracy, established in medieval era, differentiating them by country or area of origin, their main functions and longevity.
1) Witenagemot (7th century – 11th century, England) – an assembly of the ruling class, political institution in Anglo-Saxon England, which consisted of the both secular and ecclesiastic significant noblemen. Main functions: dealing the issues such as taxation and jurisprudence, internal and external security, organization of the kingdom and advisory on administration.
2) Althing (from 930, Iceland) – Originally a generally assembly, and nowadays the oldest parliament in the world. The most powerful leaders (gothi) gathered to make crucial decisions in the spheres of dispense justice and legislation. It was the main social event of the year and a platform for legal disputes, which could be attended by all free men, including craftsmen, travelers, farmers and storytellers.
3) Gulathing (900-1300, Norway) – legislative parliamentary assembly. Even though it was not an elective body, it brought an effective representation of many layers of population, but not an elite only. It can be considered as the first step in the foundation for emergency of the national law. Besides that, it was dealing with such issues as discussion of military services, building of churches and roads and taxation.
4) Thing of all Swedes (Sweden) – governing assembly, held from pre-historic times.
5) Landsgemeinde (from 1231, Uri canton, Switzerland) – cantonal assembly, one of the oldest forms of the direct democracy, which was constituted as a secret ballot voting system, functioning on the basis of majority rule. Originally, once in a year, citizens of a canton or district under open sky were voting on a number of ballot questions. In two of the cantons it was an organ of legislative power, responsible for implementing of the new laws and making changes in the constitutions of the cantons.
6) Tuatha system (early medieval Ireland) – local assembly, composed of craftsmen, landowners and masters of different professions. Among the main functions of tuath are declaration of war or peace, implementation of all common policies, election of the new «king» as a tanist, usually during the lifetime of the old king. The new king generally was a descendent of the previous king within four generations, so basically even though it was a hereditary kingship, kingships variated between lines of cousins.
7) Guild democratic system (medieval period, Italy, Switzerland, Hanseatic league (Germany, Estonia, Latvia, Poland, Sweden, Netherlands, Russia))
8) Veche (997 Belgorod – 1510 Pskov, Russia) – Historically the form of direct democracy on the territory of the Slavic states. In medieval Russia – national assembly, responsible for the judicial authority and the highest legislatures, as well as discussion of social, political and cultural issues. The participants were composed of the heads of the tribes, principalities and settlements. The rights could vary, depending on the social status, or could be equal as well. If the husbands died, the wife would represent the family on veche.
9) Wiece (Poland) – Polish version of «veche», which transformed to the Polish parliament Sejm in 1182.
10) Elizate system (medieval time, Basque Country) – generally assembly, where landlords and owners of the rural area gathered in the specific churches to make decisions, related to the issues, crucial for community and elections of representatives to the provincial juntos generals.
11) The rise of democratic parliaments (Magna Carta (1215), first representative parliament (1265), England, Scotland))
Considering the studies, which address to the relationship between the degree of democracy and economic growth, we should admit that the causality is not clear. There are two contradictory hypothesis: the former one states that the system of well-developed institutions stimulates economic growth and provides a foundation for making countries rich, and the latter one, Lipset’s hypothesis, states that liberal democracy is feasible only for the rich countries, in other words prosperity stimulates the democracy, because the establishment of such institutions is costly. It can be also that institutions of democracy and economic growth simultaneously affect each other, together with the other factors, which important specifically for democratization or for the output.
Firstly, the seminal studies, which provided a theoretical framework of institutional economy, such as Knack and Keefer [4], North [6] demonstrated that institutions of liberal democracy matter, because they tend to decrease the transactions costs by better protection of property rights and the mechanisms of contract enforcement, what promotes investment in physical capital and has a positive impact on economic growth as a consequence due to both the fact that transactions costs and lower, and via such channels as better accumulation of human capital, technological progress and labour supply.
Secondly, the regimes, associated with higher degree of democracy limit a set of possible outcomes (stability), due to the greater diffusion of power (lower probability of reversal due to the higher number of veto players, independent judiciary system, polls, and responsibility of elected incumbents to the citizens as a consequence, Olson [7], Knutsen [5]. On contrast, the regimes with lower degree of democracy (autocratic) associated with much broader set of outcomes, which mainly depends on the cognitive abilities and motives of the chief executive, other veto players, and the background in general. If the power of the ruler is not properly restricted by the set existing institutions, he has a full freedom of incentives and actions, and the main choice to make is whether to work for a common good (Lee Kwan Yew), or to maximize own wealth and the wealth of elites (military and intelligence service officials, enterprise managers, collective farm chairmen, ministerial bureaucrats, investment fund managers, commercial bankers), resorting to expropriation and predatory actions, as well as maximum effort to fix partial-reform equilibrium, as Mobutu (Congo) and Momoh (Sierra Leone).
Finally, empirical literature provides ambiguous results on the relationship between the democracy and economic growth. The variety in results can be explained by different time periods of analysis, different samples, different measurements of democracy and control variables chosen, the specifications of the models, the channels subjected to the analysis (direct and indirect effects), the criteria of differentiation between autocracy and democracy over time, and the methodology applied. For Przeworski and Limongi [8] find either the evidence of negative or statistically insignificant effect of democracy on economic growth, but they study suffered from some methodological problems, which were fixed by Knutsen [5], who on the opposite found the evidence of positive and statistically significant impact of the democracy and its institutions on the output.
The main channel of influence of indigenous institutions of democracy on the modern ones is path dependence. Once they were established and have been existing for some centuries, the reversal becomes highly unlikely and the operation of such institutions maps the path of development of the practices ruling power resorts to, and the development of society as a whole. The process of institutionalization, among others, can be considered as a self-reinforcing mechanism, and, referring to North [4], who made an analogy between technological change and institutional change, considering the work of Arthur [1], this process can be characterised by the four main properties: multiple equilibria, possible inefficiencies, lock-in once reached and path dependence. That is why institutional change becomes almost irreversible over time. If to plot any time series of any measurement of democracy (for example electoral democracy index), it is visible that once this measurement reaches some level (it may differ between the countries), it starts to grow exponentially, and generally this measurement tends to increase over time in a similar fashion, as most of economic variables, including GDP.
Secondly, as it was noted by Tocqueville, medieval institutions can be considered as a «primary school of democracy», because they could promote the development of the regime by teaching the citizens the values and the merits of democracy. In more general terms, the same was discovered by North [4], who stated that the institutional framework shapes the direction of the acquisition of knowledge and skills and an important factor of the long-term development of society. Tocqueville’s finding is a specific case of what was observed by North, in other words, institutional framework shapes the direction of the acquisition of knowledge about institutions, and if democratic framework prevails, we are having again that institutional change is self-reinforcing mechanism, in accordance with the analogy of North [4], mentioned above.
From the first sight, most of the countries, where democratic practices in the face of assemblies were applied in the medieval time are rich countries today. Focusing on the areas, it is Northern Europe (Norway, Sweden, Iceland), England and Ireland, Western Europe (Germany, Netherlands, Switzerland), Southern Europe (Italy, Spain). It is not the case only for Baltic states (Estonia, Latvia) and Eastern Europe (Poland, Russia) due to the legacy of socialism. But as a rule, it looks like the link is as follows: medieval institutions have a positive effect on the modern institutions of democracy, which in turn, have a positive significant effect on economic growth (medieval institutions – modern institutions – economic growth). In this study we will examine only the first chain of this link.
The question this research will be answering is:
Is the any evidence that medieval institutions affect modern institutions of democracy?
The hypothesis developed after a preliminary review of literature are the following:
The medieval institutions do not have any impact on the modern institutions of liberal democracy (variable medieval institutions is not statistically significant at 10% level in the regression, provided in the Equation 1)
The effect of the medieval institutions on the modern institutions of liberal democracy will be estimated by the following regression equation:
Equation 1:
(1)
Where:
– is the electoral democracy index variable;
is an intercept;
- is an explanatory control variable, which captures the years of education among citizens, who is older than 15;
– is an explanatory variable, log of GDP per capita;
– is an explanatory control variable, which captures the income from oil and gas per capita;
– is an explanatory categorical variable, which is responsible for effects of different religions;
– is a dummy variable, which capture the effect of the medieval institutions on the degree of democracy today (the variable is equal to 1 if country had indigenous institutions of democracy in medieval era, and 0 otherwise);
– is an error term;
Our main focus is on the 
coefficient (variable medieval institutions), what is expected to be positive and statistically significant. Other variables were added to the equation 1 mainly for the correct specification of the model. But we can draw our attention on the 
coefficient as well: if it is positive and statistically significant, then Lipset’s hypothesis, mentioned above holds.
All the data, used for the analysis, besides variable (religion), variable (medieval institutions) which were generated personally, was collected from the V-Dem (Varieties of Democracy) V 10 dataset, downloaded from the website of V-Dem Institute (University of Gothenburg) [2]. Varieties of Democracy (V-Dem) is a new approach to conceptualization and measurement of democracy. The V-Dem project is one of the largest ever social science research-oriented data collection programs.
The explained variable, representing the change in formal institutions (from 1789 until 2019) is electoral democracy index (v2x_polyarchy), which captures for the electoral principle of democracy : 1) responsiveness of the rulers to the citizens, guaranteed by the fair electoral competition without frauds and systematic irregularities observed ; 2) elections determine the chief executive composition of the country; 3) free operation of the political and civil society groups and organizations; 4) mass media are independent, have the freedom of expressions, and can present alternative views on different issues e.g politics. V-Dem consider electoral democracy as a crucial element of any conception of democracy: deliberative, egalitarian, participatory, liberal. The variable can take the values in the range from 0 to 1 and in fact is a weighted average of the features of the electoral democracy, described above, captured by various indices. The aggregation of the index has a following form:
v2x_polyarchy=0,5*(v2x_elecoff*v2xel_frefair*v2x_frassoc_thick*v2x_suffr*v2x_freexp_altinf)+0,5*((1/8)*v2x_elecoff+(1/4)*v2xel_frefair+(1/4)*v2x_frassoc_thick+
(1/8)* v2x_suffr+(1/4)* v2x_freexp_altinf)
Where:
v2x_elecoff - is an index of elected officials, v2xel_frefair – is an index of clean elections, v2x_frassoc_thick – index, measuring whether a freedom of association is thick, v2x_suffr – index, measuring suffrage and v2x_freexp_altinf – freedom of expression [3, p. 42].
Categorical variable religion was generated in a way that it reflects the religious majority group in the country (for example if the largest share of the population of the country follows Islam, then this specific country belongs to the Islam category in the variable religion and so on).
Medieval institutions – is a dummy variable, which is equal to 1 if during medieval time country had some practices of democracy, indigenous institutions of democracy such as assemblies or others, mentioned above, and 0 otherwise.
In order to avoid of omitted variable bias, some other control variables available in the dataset were included, namely: education 15+ (e_peaveduc), logged GDP per capita (e_migdppcln), and total oil and gas income per capita (e_total_fuel_income_pc).
The results are represented in the Table 1.
Table 1.
The effect of medieval institutions on modern institutions of liberal democracy
Based on the results from the Table 1, institutions of democracy from the medieval era are indeed efficient determinants of the level of democratization today, the variable «medieval institutions» is positive and statistically significant at 10% level (p-value=0,052). If the country has started institutional changes in the medieval era, in average the degree of democracy today is approximately 10% higher. Therefore, we have enough evidence to reject Hypothesis 1 in favour of the alternative hypothesis.
As in accordance with our expectations, the operation of assemblies on the territory of Europe in the medieval time can be considered as a foundation of the solid institutional framework today. In other words, the first chain of the link (medieval institutions – modern institutions – economic growth), which we examined is indeed true. If the second part of the link holds as well, as it was discovered the seminal studies, which provided a theoretical framework of institutional economy, such as Knack and Keefer [4], North [6], and in modern empirical literature in the field of political economy, which applies a reliable methodology for demonstration of the positive and significant effects of institutions on economic growth, such as Knutsen [5], then medieval institutions can be considered as an important determinant of economic growth today and can be viewed as an effect, which takes roots via the channel of path dependence, provides an edge for the countries, which have started democratization earlier and differentiates them from other countries in terms of prosperity today. In fact, other factors, such as the era of socialism, which slowed down and in some cases (Russia, Poland and others) even reversed the process, the relative prices of changes and the pace of institutionalization matter as well, but the presence of medieval institutions, as it was demonstrated in this study, indeed might be one of the important determinants of wealth today and when answering the question : «Why some countries are rich and some countries are poor?» definitely deserves a special attention.
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