Constitutions, Corporations, and Corruption: American States and Constitutional Change, 1842 to 1852John Joseph Wallis ,
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Journal of Economic History
Constitutions, Corporations, and Corruption: American States and Constitutional Change, 1842 to 1852
During the 1840s, twelve American states adopted new constitutions. Eleven of the twelve states adopted new procedures for issuing government debt and for chartering corporations through general incorporation acts. These institutional innovations were American inventions, and today hard budget constraints and transparent corporate forms with secure stockholder rights are important institutional determinants of successful economies. This paper investigates how and why these two important institutional reforms occurred at precisely the same time.