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This book develops a model of institutional change in European commerce based on urban competition. Cities continuously competed with each other by adapting commercial, legal, and fin ancial institutions to the evolving needs of merchants. The book traces the successive rise of Bruges, Antwerp, and Amsterdam as commercial cities between 1250 and 1650, showing how dominant cities feared being displaced by challengers while lesser ones sought to keep up by cultivating policies favorable to trade. It argues that it was this competitive urban network that promoted open access institutions in the Low Countries, and emphasizes the central role played by the urban magistrates in fostering these inclusive institutional arrangements. The book describes how the city fathers resisted the predatory or reckless actions of their territorial rulers, and how their nonrestrictive approach to commercial life succeeded in attracting merchants from all over Europe. It intervenes in an important debate on the growth of trade in Europe before the Industrial Revolution. Challenging influential theories that attribute this commercial expansion to the political strength of merchants, the book demonstrates how urban competition fostered the creation of inclusive institutions in international trade.

The book is about one of the biggest economic success stories that one has hardly ever heard about. It is about a perennially backward, poor, and peripheral country, which over the last twenty-five years has unexpectedly become Europe’s and a global growth champion and joined the ranks of high-income countries during the life of just one generation. It is about the lessons learned from its remarkable experience for other countries in the world, the conditions that keep countries poor, and challenges that countries need face to grow and become high-income. It is also about a new growth model that this country—Poland—and its peers in Central and Eastern Europe and elsewhere need to adopt to continue to grow and catch up with the West for the first time ever. The book emphasizes the importance of the fundamental sources of growth—institutions, culture, ideas, and leaders—in economic development. It argues that a shift from an extractive society, where the few rule for the benefit of the few, to an inclusive society, where many rule for the benefit of many, was the key to Poland’s success. It asserts that a newly emerged inclusive society will support further convergence of Poland and Central and Eastern Europe with the West and help sustain the region’s Golden Age, but moving to the core of the European economy will require further reforms and changes in Poland’s developmental DNA.