How did local legal institutions power the British Industrial Revolution? In a new working paper, available here in open access, Tim Besley, Dan Bogart, Jonathan Chapman and I show that Justices of the Peace (JPs) — magistrates acting locally — were a quiet engine behind modern economic growth. The paper is also available as a CEPR discussion paper.
We often hear the state had little to do with Britain’s Industrial Revolution. We argue otherwise. Using novel data, we show that “street-level” legal capacity, via JPs, played a crucial role in enforcing property rights, resolving disputes & managing public goods.
JPs were local elites—usually unpaid, but powerful—tasked with matters from contract enforcement to infrastructure oversight. Their presence made legal systems more accessible, faster, & cheaper—especially in an age before a professional paid bureaucracy.
We find that counties with more JPs in 1700 saw: Higher population growth; Faster urbanization; Greater economic diversification; More infrastructure and innovation; Better human capital (via apprenticeships).
Crucially, the location of JPs in 1700 was not driven by anticipated growth — meaning the effect is causal, not just correlation. In other words: more JPs → better long-term development outcomes.
JPs helped towns capitalize on the Industrial Revolution: Industrial towns near coalfields grew faster with more JPs; JPs helped enforce contracts, settle disputes, and foster trust; and the effects appear gradually over time! The choice of the outcome year is not critical. The takeaway? Institutions also operate locally. Local legal actors — even unpaid ones — can shape economic trajectories in powerful ways. The state was heavily involved with the First Industrial Revolution.
