Property Rights Under Administrator-Dictators: The Rise and Fall of America’s First Bank

Dror Goldberg and Igal Milchtaich

The Journal of Economic History 73 (), 1105–1131


The dictatorial Dominion of New England (1686–1689) saw the rise and fall of the first operational bank scheme in America. Both events resulted from the appointed rulers’ attempts to personally profit from real estate, subject to an absolutist constitution imposed by England. The first, local ruler led a nominally private land bank. The subsequent, foreign ruler invalidated all land titles and thus killed the bank. This unusual case study exemplifies an extension of Mancur Olson’s model of stationary and roving bandits, and demonstrates how economic development can be affected in different ways by different types of dictators.