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Rising per capita incomes generated by rural development helped make the industrialization of Europe possible. The current dominant approaches to rural development in European history stress the role of either local class relations or state institutions. Both approaches ignore the role of local institutions. Although class relations and state institutions were important in rural development in European history, the regional analysis presented here shows that these factors alone were not enough. Also important was a suitable institutional structure at the local level. Local institutions and associated class relations also shaped when enclosure occurred and what its effects were and thus need to be taken into account by those assessing the efficiency value of enclosure.