This book explains why contemporary liberal democracies are based on historical templates rather than revolutionary reforms; why the transition in Europe occurred during a relatively short period in the nineteenth century; why politically and economically powerful men and women voluntarily supported such reforms; how interests, ideas, and preexisting institutions affected the reforms adopted; and why the countries that liberalized their political systems also produced the Industrial Revolution. The analysis is organized in three parts. The first part develops new rational choice models of (1) governance, (2) the balance of authority between parliaments and kings, (3) constitutional exchange, and (4) suffrage reform. The second part provides historical overviews and detailed constitutional histories of six important countries: the United States, United Kingdom, Sweden, the Netherlands, Japan, and Germany. In all the countries discussed, liberal democracy emerged from a long series of constitutional reforms, rather than as a quantum leap from authoritarian to democratic governance. The third part provides additional quantitative evidence in support of the theory, summarizes the results, contrasts the approach taken in this book with that of other scholars, and discusses methodological issues.