In this interesting and timely book, Jaco Zuijderduijn argues that early state formation in late medieval Holland was at once a cause and a product of the rise of efficient capital markets; this virtuous cycle, in his view, had far-reaching implications for the performance of the economy at large. He draws on an impressive array of secondary sources, complementing them with some primary research. Although the previous neglect of premodern capital markets is somewhat overstated, the originality of the analysis is not in doubt: by harnessing the insights of New Institutional Economics, a new light is cast on the functioning of late medieval public and private markets for renten. Still, the extent to which the evidence mustered warrant the claim that centralization and capital markets were such blessings remains open to questions.

Chapter 1 illustrates how state formation changed the life of Hollanders with telling examples of how ordinary creditors successfully appealed to the comitial court against defaulting lords and cities. However, as Zuijderduijn notes, these remained exceptions; the majority of legal disputes were resolved at the local level, where the leasing of offices implied corruption of centrally appointed officials, to the extent that eventually local appointment had to be revived. Zuijderduijn argues otherwise, but his account highlights that the scope of centralization was limited and some of its effects were ambivalent. Chapter 2 persuasively revises the perspective that there was a “financial revolution” in the sixteenth century by showing how the creation of a funded debt with collective responsibility using future tax revenues as collateral gradually evolved from the thirteenth century onwards. On the whole, the argument that such developments empowered both the sovereign and the public is convincing. Yet, clearly the match between the market for public renten and the emerging representative institutions was less than perfect; the States of Holland, which included members of the landed nobility and the rural population, is a case in point. It follows that the role of capital markets in promoting constitutional change should not be overstated, but instead of exploring the consequences of social diversity, Zuijderduijn conceals it under the umbrella of a rather anachronistic use of the term “public.”

Chapter 3 offers an informative discussion of how the institutional framework of public markets functioned on the ground, which is worth summarizing in details. Here, Zuijderduijn shows how financial intermediaries addressed asymmetric information by contacting potential buyers and delivering payments to those entitled. Although imprisonment of members of defaulting cities was rarely a viable option, the issue was mitigated by informal institutions, such as the leisting that burdened the debtors with the expenses of being tracked down. These “good institutions” were not waterproof, though; their effectiveness was limited by “bad institutions”: potential buyers were screened by intermediaries, who excluded clergymen and people from places with strong commercial links with the issuing city. Despite its merits, the analysis falls short of persuading that it was a strong central government that enabled “good institutions” to function; the frequent resort to informal institutions, for one, would suggest otherwise. Indeed, it seems that secularization contributed to the development of “bad institutions”: from Zuijderduijn's account, canon law emerges as more powerful than secular rule as a means of fostering credible commitments; so much so that the cities deliberately prevented religious bodies from buying renten even in the secondary market.

The figures shown in Chapter 4 suggest that picture was more nuanced than the one of inexorable growth of the funded debt that Zuijderduijn presents. Sharp increases in the financial significance of public renten are found after the mid-fifteenth in Dordrecht and Gouda, but otherwise clear evidence of long-term growth is hard to come by. The geographical spread of buyers of renten issued by Leiden does suggest a widening of the reach of the market during the fifteenth century, but the Haarlem figures highlight that this measure exhibits high volatility and detect a lower share of local investors at the beginning than at the end of the fifteenth century. Moreover, surely these figures have little to tell about the social depth of the market; likely enough, the Dordrecht mason Aert Jansz was concerned about an expansion of the urban debt because this typically implied a rise in the burden of indirect taxation and thus a fall in his real wage, rather than being worried by the risk of default.

Chapters 5 and 6 turn to private capital markets. Zuijderduijn claims that increasingly rules were set centrally, while highlighting that enforcement remained local; his emphasis is on advancements in the definition of property rights, as written records of renten were kept by local authorities, and contract enforcement, as the compensation of creditors was assisted by organizing seizures of goods, auctions, and the like. All in all, it seems that strong cities, more directly than a strong central government, were crucial in making such developments possible, particularly as the examples that Zuijderduijn provides refer to local transactions. Though patchy, there is no denying that the evidence presented suggests that a lively market developed: secondary transactions were recorded as early 1314, by 1462 perhaps as much as a third of the populations of the small cities of Edam and De Zeevang received or paid renten, and interest rates almost halved between 1384 and 1440. As Zuijderduijn rightly points out, it is difficult to explain this drop with the Black Death or monetary policy. Nevertheless, the conclusion that it was all due to institutions remains hasty: other analyses do find negative associations between economic expansion and the cost of borrowing, and the fall was more abrupt than predicted by a gradually improving institutional quality.

In an apt addition to the original Ph.D. manuscript, Chapter 7 compares Holland's to other capital markets. Unfortunately, the opportunity to systematically support the claims that transaction costs were indeed particularly low in Holland, and that this caused capital accumulation and economic growth is missed. Only a few interest rate figures are presented, and one looks in vain for a systematic comparison of transaction costs, size of the capital markets, and economic performance. Instead, Zuijderduijn shows how the development of markets for public renten in northern France, Flanders, Brabant, and the Holy Roman Empire largely paralleled that in Holland, and assumes rather than demonstrates that social selection was a disease from which the latter was spared. The comparison with England merely reiterates the known fact that professional moneylenders offered bad conditions of borrowing to rulers, while that with the Italian city-states overlooks that the system of forced loans originated during the “commercial revolution”—a period of uncontroversial economic success for the peninsula—and that it developed within a context of weak feudal structures. Hence, the claims that weak feudalism was sufficient to avert regressive redistributive effects in Holland, and that, in turn, this implied growth instead of stagnation seem unjustified. In conclusion, there is much that is interesting and valuable in this book, but it is not always possible to share Zuijderduijn's often triumphant tone.