The Financial Power of the Powerless: Socio-economic Status and Interest Rates under Partial Rule of Law

• 成果类型: Article
• 署名作者: Kuran, Timur; Rubin, Jared
• 署名单位: Duke University; Chapman University System; Chapman University
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12389
• 发表日期: 2018
• 页码: 758-796
• 关键词: private credit markets; institutions; debt; revolution; medieval; RISK; DISCRIMINATION; constitutions; restrictions; INEQUALITY

摘要

In advanced economies interest rates vary inversely with the risk of default, which itself is negatively related to the borrower's socio-economic status. The former relationship depends on the impartiality of the law. Where the law is markedly biased in favour of certain groups, these groups will pay a surcharge for capital. Legal power, as measured by privileges before the law, thus undermines financial power, the capacity to borrow cheaply. Developing this argument, this article also tests it through judicial records from Ottoman Istanbul, 1602-1799. Three privileged Ottoman groups-men, Muslims and titled elites-all paid relatively high interest rates conditional on various loan characteristics.