Public Finance of the Dutch Republic in Comparative Perspective

The Viability of an Early Modern Federal State (1570s-1795)


This study offers the first complete overview of the remarkable public finances of the Dutch Republic of the United Provinces. Wantje Fritschy has analysed the development and structure of its public revenue and expenditure. She argues that a ‘tax revolution’ and the ‘fiscal resilience’ of the provinces together were more important for its surprising performance than Holland’s public debt alone, and the institutional and economic characteristics of its ‘urban system’ were more important than wealth due to foreign trade. Comparisons with the fiscal systems of three more centralized states - the Venetian Republic, Britain and the Ottoman Empire - underline the crucial importance of long-term ‘urbanization trajectories’ in understanding early-modern fiscal performance. It was not because it was federal that the Dutch Republic collapsed.
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Biographical Note

Wantje Fritschy (Ph.D. Leiden 1988) is retired senior lecturer in Economic and Social History and professor in the History of Early Modern Public Finance at VU University Amsterdam; she has led a large research project on public finance in the Dutch Republic at the Huygens Institute of Netherlands History (Huygens ING) in The Hague.

Table of contents


The question at stake
Possible answers
Political institutions
Economic factors
‘Urban systems’ and state formation
The approach of this book
The structure of this book

PART ONE The development of the fiscal system of the Dutch Republic

Introduction: a new state
0.1 The Union of Utrecht: the start of a new state?
0.2 Historical backgrounds and institutional characteristics
From Revolt to Republic
The institutional legacy of the Habsburgs
The States General, Holland, the Council of State and the stadholder
The fiscal articles of the Union of Utrecht
0.3 The concept ‘public finance of the Dutch Republic’, the data and the estimates
Public finance of and in the Dutch Republic
The reliability of data and estimates

1. Financing the first phase of the revolt against Spain (1566-1572)
1.1 Calvinist donations and the credit of the Prince of Orange
1.2 A prince in search of new sources of finance
1.3 The first financial decisions of the ‘free’ States of Holland
1.4 Conclusion

2. From under-taxed part of an empire to heavily taxed republi
2.1 Holland and the Spanish Empire
Holland’s fiscal system under the Habsburgs
Alva’s attempt at centralization
Castile’s fiscal system
2.2 The development of Holland’s fiscal system until 1609
The increasing amounts needed for the war
Holland’s ‘tax revolution’
Direct and indirect taxes
The tax burden before and after the Revolt
Loans as a source of revenue: ‘short’ term obligations and long term annuities
Holland’s ‘real’ financial revolution
Holland’s fiscal system at the start of the Twelve Years Truce
2.3 The other provinces
The importance of Zeeland
The ‘general means’ and the States General
The ‘general means’ and the provinces: urban resistance and urban acceptance
The ‘quotas-system’ and the fiscal performance of the provinces
2.4 The financial scope of the ‘Generality’
Former royal domains and other confiscated property as sources of public revenue
Foreign financial support
Generality taxes
Privateers booty and customs (‘convooien en licenten’)
2.5 Conclusion

3. Public finance of the Dutch Republic in the 17th and 18 th centuries
3.1 The increasing public expenditure of the Dutch Republic
War expenditure
Debt service
Other public expenditure
3.2 The resilience of the provincial revenue systems
The ‘institutional structure’ of the public revenue of the Republic
The ‘social-economic structure’ of the public revenue of the provinces
Price-increasing taxes on general consumption and tax riots
Price-increasing indirect taxes on ‘luxury’ consumption
The increasing role of direct taxation
The ‘tax morale’ of Dutch citizens
The tax burden in Holland and in Overijssel
‘Capital’ or ‘coercion’: the role of loans in Dutch war finance
A comparison with the centralized tax system of 1807
3.3 Conclusion

PART TWO The fiscal system of the Dutch Republic in international comparative perspective


4. A comparison with the Venetian Republic
4.1 Common characteristics and long term differences
Much in common
Differing long term domestic developments
Another maritime state and its ‘Year of Disaster’
4.2 ‘Survive and prosper on the cheap’
The structure of public expenditure
A ‘peaceful republic’ and an ‘expenditure bottom’?
4.3 Taxation in a centralized and a federal urbanized republic
Differences in public revenue and in wealth
The fiscal contributions of ‘centre ’ and ‘periphery’ in the two republics
4.4 Differing debt developments
‘Mountains of debt’, forced loans and ‘citizenship’
Voluntary loans based on trust and private interest
Debt sizes, interest burdens and interest rates
Public banks and public loans in both republics
4.5 Conclusion

5. A comparison with Great Britain
5.1 The comparability of Britain and the Netherlands
5.2 National public finance: a long term perspective
5.3 Public expenditure in two maritime states
Total public expenditure before and after c. 1690
A comparison of military expenditure before 1688
The structure of Dutch and British public expenditure since c. 1690
5.4 Public revenue in two commercial states
Total public revenue compared
Non-parliamentary and parliamentary taxation
Customs in a large monarchy and a small republic
Indirect taxation, urbanization and centralization
The EIC, the VOC and public revenue
5.5 A comparison of loan financing and public debt
Foreign merchants and the king’s subjects versus cities and citizens
Downing and the Dutch example
‘1672’ in Britain
The long road of Britain’s ‘financial revolution’
A quantitative comparison of the British and the Dutch public debt
5.6 Conclusion

6. A comparison with the Ottoman Empire
6.1 Two incomparable states
Why was Ottoman public revenue so low?
6.2 Contrastive long term trajectories of state formation
Contrasting population developments
Contrasting patterns of land use
‘State-driven’ versus ‘economy-driven’ urbanization trajectories
The consequences for public finance of different urbanization trajectories
6.3 A quantitative comparison of public revenue
The extremely low level of state revenue in the Ottoman Empire
The marginal importance of domestic indirect taxation
‘Coin clipping’ as a source of public revenue
6.4 Deficits, ‘advance payments’, advances and debt
The malikane-system
The esham-system
Public debts and the interest prohibition
6.5 Conclusion


APPENDIX: The taxes in the Dutch Republic


General readers with an interest in the history of the Dutch Republic or in the history of public finance as well as specialists.


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