Bank Bargains and Entangled Political Economy : The Evolution of the Bank of England

This paper examines the evolution of the Bank of England under a framework of entangled political economy that originates in a process of bank bargains. The theory explains the process by which the political economy order becomes increasingly entangled in the banking system, leading to a banker's bank to emerge. The theory suggests that the entanglement allows the polity organization to transmit some of it features to the economic organization. The transmission of non-market characteristics was an essential part of the bargains, leading to the Bank's transformation. This paper contributes to a public choice rationale for the emergence of central banks and to political entanglement theory by providing an additional source for its dynamic development