From Investiture to Worms: A Political Economy of European Development and the Rise of Secular Authority∗ Bruce Bueno de Mesquitay Ethan Bueno de Mesquitaz July 15, 2018 Abstract The endogenous consequences of competition between the Roman Catholic Church and secular rulers set into motion by the Investiture Controversy contribute new insights into European economic development, the rise of secular political authoriy, and the decline of the Catholic Church's political power. In particular, the resolution of the Investiture Controversy in the Concordat of Worms (1122) resulted in a significant increase in the bargaining power of secular rulers in wealthier polities relative to poorer polities. This created an institutional environment in which the Catholic Church had incentives to limit economic development while secular rulers could expand their political control by promoting development within their domain. Empirical evidence shows that the behavior of popes and of secular rulers changed in ways consistent with these incentives. The evidence indicates that the incentives created at Worms played a central role, starting hundreds of years before the Protestant Reformation, in the rise of secular political authority and its association with economic prosperity. ∗We have benefited from feedback from Scott Ashworth, Chris Berry, Wioletta Dziuda, Mark Fey, Alexan- der Fouirnaies, Anthony Fowler, Rose McDermott, Adam Przeworski, James Robinson, Shanker Satyanath, Alastair Smith, and Thomas Zeitzoff. Sasha Daich, Katie Jagel, Matt Osubor, and Andrew Peterson pro- vided excellent research assistance. yThe Wilf Family Department of Politics, NYU, email:
[email protected] zHarris School of Public Policy, University of Chicago, email:
[email protected] At least since the seminal work of Weber(1930), discussions of the political and economic development of Europe have sought to understand the linkage between economic prosperity, the rise of secular authority, and the decline of the Catholic Church as a political power.