The linchpin of colonial administration under regulatory imperialism was the royal governor. The crown relied on royal governors to control the colony’s political agenda, especially on fiscal matters. Yet, in most colonies, assemblies managed to invert this plan and claim almost complete fiscal power for themselves – one of the most important developments under imperial administration in the New World. To explain this, the present chapter develops a strategic logic of bargaining between assemblies and governors and the accountability of governors to the crown. The logic shows how governors were able to make major political concessions to assemblies, yet evade accountability to the crown for them. As a result, regulatory imperialism was unable to restrain the independence of colonial legislatures.

This chapter explores the terms of letters patent for internal colonial government. It observes that every patent to a private colonizer prescribed a balanced colonial constitution: Some type of independent legislature in the colony, separate from the colonial executive, was to consult on laws and taxes. The chapter presents a strategic model to explain why this served the crown’s interest: An independent colonial legislature could restrain excessive extraction from colonists by colonial executives, which the crown itself – given the distance and its limited capacity – could not do.

How did colonies develop under contractual imperialism? This chapter reviews three important cases – Virginia, Massachusetts Bay, and Barbados – and argues that contractual imperialism had important successes. Under contractual imperialism, colonizers did search vigorously for resource endowments, and made and re-made their economies at significant cost to exploit them. Patent terms for balanced colonial polities did restrain some of the excesses of colonial government under their founding elites. At the same time, experience revealed important problems with contractual imperialism: It was not effective at coordinating an empire of multiple colonies, and it provided such strong incentives that it generated significant factional disputes within colonies. Nevertheless, under contractual imperialism, English colonies established successful cash-crop economies.

A key component of regulatory imperialism was controlling the colonial government. While the crown accepted colonial assemblies as independent bodies, it attempted to regulate the laws they passed. In particular, imperial officials in London asserted the power to review all colonial legislation and declare acts void if they violated English law or imperial policy. This chapter examines royal legislative review from a strategic perspective as an auditing system. It shows that legislative review worked in part by inducing royal governors to exercise stricter scrutiny over colonial legislation before it ever reached London. At the same time, the analysis shows that legislative review was inherently imperfect. The cost of review to imperial officials ensured that colonial assemblies could pass laws that imperial officials opposed. As a result, legislative review was unable to eliminate the autonomy of colonial assemblies.

This chapter takes stock of institutional configurations in the New World colonies at the time of the American Revolution. It observes that the same bundle of institutions that made individual colonies autonomous relative to the crown also made them autonomous relative to each other. In turn, this mutual autonomy presented major constraints when American state elites bargained over a national constitution. These bargaining constraints, as well as the institutional models of imperial government, resulted in some of the core institutions of the American state that structure so much policy making today: Federalism, checks and balances with a powerful legislature, judicial review, and even specific executive bureaucracies. The chapter concludes with a summary of the book’s argument.

This introductory chapter lays out the historical background of English New World colonization and sketches the argument of the book. It explains the English crown’s formal authority over colonization and introduces the principal–agent perspective as a framework to analyze the crown’s use of that authority. The chapter lays out the concept of contractual imperialism, or the early crown’s policy of early colonization embedded in letters patent to private colonizers, and of regulatory imperialism, or the later crown’s policy of regulating colonial political economies.

As English state capacity grew and the crown faced growing financial constraints at home, colonies became tempting targets. This chapter explores the crown’s attempts to unwind the institutions of contractual imperialism and assert unilateral, direct control over colonies. However, when the crown made these attempts, colonial institutions had taken deep root over decades. The chapter explains why the crown was unable to force its vision of government on the colonies autocratically, and instead pivoted to a negotiated model of governance: Regulatory imperialism.

This chapter explores the terms of letters patent for early colonies, particularly in their economic dimensions. It shows the textual basis for colonial autonomy in these patents as grants from the crown. In particular, patents granted long-term control of colonies to private actors, protected their control over colonial economic operations, and obliged minimal sharing of their economic output with the crown. The chapter presents the theory of contractual imperialism to explain why these contract terms solved an important incentive problem: To induce colonial agents to identify profitable resource endowments, despite great cost and risk, and to exploit them fully.

The crown’s pivot to regulatory imperialism accepted colonial institutions as they existed, and attempted to direct them more vigorously in the English state’s interest. This chapter explores the economic side of that regulation through the Navigation Acts, in particular a strategic perspective on their administration. It shows that the administrative structure of the acts evolved with a sophisticated understanding of the incentive problems of agents charged with their enforcement. The imperial customs bureaucracy in the New World and a crown court system were erected to deal with these problems. At the same time, the chapter explains how the acts were rarely administered so well in practice, which undermined their effectiveness.