“North and Weingast (1989) argued that the institutions created after 1688 allowed the English government to commit credibly to upholding property rights, citing evidence from capital markets; Sussman and Yafeh (2006) found that British interest rates stayed high and volatile for four decades after the Glorious Revolution.”

Context. Sussman and Yafeh conclude that in the short run institutional reforms were not rewarded by financial markets: Britain did not borrow at lower rates than European countries with weaker protection of property rights.