European Historical Economics Society EHES WORKING PAPERS IN ECONOMIC HISTORY | NO. 104 Accounting for the ‘Little Divergence’ What drove economic growth in pre-industrial Europe, 1300- 1800? Alexandra M. de Pleijt and Jan Luiten van Zanden Utrecht University NOVEMBER 2016 EHES Working Paper | No. 104 | November 2016 Accounting for the ‘Little Divergence’ What drove economic growth in pre-industrial Europe, 1300- 1800?* Alexandra M. de Pleijt and Jan Luiten van Zanden** Utrecht University Abstract We test various hypotheses about the causes of the Little Divergence, using new data and focusing on trends in GDP per capita and urbanization. We find evidence that confirms the hypothesis that human capital formation was the driver of growth, and that institutional changes (in particular the rise of active Parliaments) were closely related to economic growth. We also test for the role of religion (the spread of Protestantism): this has affected human capital formation, but does not in itself have an impact on growth. JEL classification: N13, N33, O40, O52 Keywords: Europe, Economic growth, Little Divergence, Human capital formation * We thank participants at seminars, conferences or workshops at the London School of Economics, the University of Groningen, the University of Warwick, Tsinghua University Beijing, the University of Southern Denmark, and the XVIIth World Economic History Congress in Kyoto for their valuable comments on previous versions of this article. In particular, we are grateful to Jutta Bolt, Stephen Broadberry, Selin Dilli, Bishnu Gupta, Debin Ma, Ulrich Pfister, Jaime Reis, and Paul Sharp. ** Email corresponding author:
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