Do strong property rights institutions always help, or might they sometimes actually hinder development? Since Max Weber and before, scholars have claimed that the presence of politically autonomous cities, controlled by merchant oligarchies guaranteeing property rights, helped lead to Europe's rise. Yet others suggest that autonomous cities were a hindrance to growth because rule by merchant guilds resulted in restrictions that stifled innovation and trade. I present new evidence and a new interpretation that reconcile the two views of city autonomy. I show that politically autonomous cities initially had higher population growth rates than nonautonomous cities, but over time this situation reversed itself. My evidence also suggests why autonomous cities eventually disappeared as a form of political organization. Instead of military weakness, it may have been their political institutions that condemned them to become obsolete.
Published on《 American Political Science Review》 in May, 2014.