How Merchant Towns Shaped Parliaments: From the Norman Conquest of England to the Great Reform Act

After centuries of stagnation in the "Dark Ages," the Commercial Revolution led to a boom in economic activity and urbanization across Western Europe. The surge in trade and commerce that began in the 11th century was followed by the emergence of self-governing merchant towns. Soon after, these merchant towns gained representation in regional and national parliaments. This paper establishes the mechanism by which trade led to parliamentary representation, via municipal autonomy. We focus on England after the Norman Conquest of 1066 and build a novel comprehensive dataset of 554 Medieval towns (boroughs), tracking their institutional development over eight centuries. We document a two-step process: First, inefficiencies in the king's centralized system of tax collection became increasingly distortive to trading towns. In a mutually beneficial solution, merchant towns paid higher annual taxes in exchange for Farm Grants — the right of self-governed tax collection, cutting out royal officials. Second, Farm Grants were stepping stones towards representation in the English Parliament: To raise extraordinary taxes (e.g., for wars) from self-governed towns, the king had to negotiate with them — and negotiations took place in Parliament. We also show that Medieval self-governance had important long-term consequences and interacted with nationwide institutional changes. Boroughs with Medieval Farm Grants continued to have broader voting rights in the 17th to 19th centuries, they raised troops to back Parliament against the king during the Civil War in 1642, and they supported the Great Reform Act of 1832 that extended the franchise.