War and the Rise of Parliaments

We study European political institutions between 1350 and 1700 AD. Our model links (i) the calling of parliament and (ii) the transition to Rule by Parliament with the risks associated with wars and battles, and with the underlying economic relationship between monarchs and the commercial elites. We compile a dataset for England, Castile, France, and Portugal that includes yearly parliamentary activity, battles, war years, and measures of economic activity. In support of the model, parliaments are more likely to be called when (a) the country suffers a territorial defeat; and (b) agriculture output is relatively low. The causal relation between a territorial defeat and parliament being called is supported by an event-study comparing the impact of defeat relative to a win. We find evidence of a short-term (one year) impact, but no long-term effects. Transitions to Rule by Parliament require specific goldilocks parameters according to the model (moderate military strength and moderate alignment between monarch and the commercial elites) and are only feasible during a window of opportunity, i.e., while a sitting monarch is facing an existential threat.