War and the transition away from Absolutism

We propose a model to explain the transition from Absolutism to rule by Parliament. The Elites face a trade-off between the loss of a war today with the future benefits under an alternative Monarch. The threat of losing a war and being replaced may lead the Monarch to compromise with the Elites and hand over power. The model has two key parameters. One is the fraction of the country's wealth that is non-verifiable (and therefore hard for the Monarch to tax or expropriate). The second is how aligned preferences for war are between the Elites and the Monarch. Our model gives a rationale for why absolutism ended in England by 1688 but not in France or Spain.