EmpiricalRequires evidence

The English poor laws are the cleanest natural experiment in the book, and they show a collective risk being bought down at enormous cost. By the end of the seventeenth century about 1 percent of national income went on poor relief, enough for complete subsistence for 5 percent of the population, rising to about 2 percent by the end of the eighteenth, against central government taxation of 3.5 percent of national income in the 1670s and 1680s. So relief consumed a large share of all state revenue. The payoff: in the 1690s bad weather caused crop failures across north-western Europe that killed an estimated 10 percent of the population in France and in Scotland, while England shared the poor harvests and escaped famine entirely. Same weather, different institutions, a tenfold difference in deaths.

Risk landscape