Funding public services through religious and charitable foundations in the late-medieval Low Countries

Religious and charitable foundations are often held to have been a sub¬stantial presence in pre-industrial societies. One of their key tasks was the funding of public services, specifically social and religious services. This dissertation has tried to explain the regional variation in the extent to which foundations funded these public services. It was first documented that foundations funded their activities through returns on asset ownership, especially land. The religious and charitable sector owned up to forty per cent of the land in regions with weak territorial states and a strong nobilities. Large-scale asset ownership had economic consequences. High levels of institutional landownership resulted in significant distortions on lease markets for land. However, the ownership of financial instruments by foundations made them only a minor presence on late-medieval financial markets. The religious and charitable sector made modest, though significant contributions to social spending in the late-medieval period. Asset returns, a crucial aspect of the finance of foundations, were unimportant for the funding of education. Religious services were by far the highest priority of foundations. In terms of expenditures on the their primary purpose, religious and charitable foundations were efficient organisations, having about as much overhead as present-day charitable and public equivalents. The religious and charitable sector varied in size, reaching between three and fifteen per cent of regional GDP. The sector had grown at an annual rate of circa 0.4 per cent in the late-medieval period to reach this size. This means that as far as their economic weight is concerned, the literature probably overstates the importance of church and charity in the medieval period. The final task of this research was to find out what determined the levels of public service provision. High levels of per capita social spending by religious and charitable foundations were linked to open political systems. Alternative social insurance arrangements and regulation by corporate actors were found to substitute for social spending by foundations. Finally, social and religious services turned out to be complements rather than substitutes – they had grown together, not at the expense of one another