The Economics of Sea Power. Property rights arrangements and institutional change in Elizabethan England

This article focuses on the institutional conditions that helped England to be transformed into a sea power during the reign of Queen Elisabeth I (1558-1603). Institutional change was the result of a successful coordination of public choices in order to or ganize national defense and privateering expeditions against Spain s trade and its New World colonies. The creation of the stock-market and the establishment of joint stock overseas trade companies were both the outcome of a large alliance between public and private interests, leading to an effective arrangement of property rights and of the appropriate incentives related to them, inaugurating a path responsible for the development of Great Britain over the next centuries. From a methodological point of view our analysis provides an assessment of the appropriateness of the conceptual framework of property rights in understanding commercial capitalism.