Questioning Credible Commitment

Reviews / Votes

'Credible commitment is fundamental to finance. This volume of excellent essays by financial historians explores the salient institutional theories about the development of credible commitment. In doing so, it illuminates a watershed period in the emergence of the modern economy.' William N. Goetzmann, Edwin J. Beinecke Professor of Finance and Management Studies, and Director, International Center for Finance, Yale University 'A central thesis in explaining Britain's role as the first industrial nation was its prior financial revolution, assertedly based on the 'credible commitment' of post-Glorious Revolution governments to repay their debts. But no single, salient event - not even the establishment of parliamentary supremacy - could alone explain how relationships of trust emerged between the institutions of the state and private holders of wealth, creating the conditions for first merchant and then industrial capitalists to gain continuing access to liquid capital and the credit required to finance a growing economy. This enthralling collection of first-class scholarship enriches our understanding of the complex, interdependent and highly contingent processes that reached back generations before William of Orange was offered the English throne and extended well into the eighteenth century.' Dr William H. Janeway, CBE, Managing Director and Senior Advisor, Warburg Pincus, and Visiting Scholar, Princeton University 'As the credibility of governments' fiscal policies is put to the test on a daily basis by financial markets, history teaches useful lessons. This highly readable volume puts together a wide range of views - including skeptical ones - on the role of institutional reforms as determinants of variation in the cost of sovereign borrowing.' Paolo Mauro, International Monetary Fund, and co-author of Emerging Markets and Financial Globalization: Sovereign Bond Spreads in 1870-1914 and Today