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Avner Greif - One of the best experts on this subject based on the ideXlab platform.
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Political Organizations, Social Structure, and Institutional Success: Reflections From Genoa and Venice During the Commercial Revolution
2016Co-Authors: Avner GreifAbstract:system able to provide them with the naval, military, and Commercial infrastructure required for economic expansion. In other words, they had to have a political system that could enable them to cooperate in fostering economic growth. Indeed, the history of the Italian city-states of the late medieval period is that of endogenous emergence of political systems explicitly aimed at advancing the economic interests of those who established them. This note examines the relationship between some aspects of the political organization of Italian city-states, their social structures, and the success of their political systems in fostering their economic objectives. x Specifically, it utilizes the history of Genoa and Venice - the two most Commercially successful Italian maritime city-states - to reflect on these relationships. Examining the relationship between economic growth and political structure, this note identifies with the work of North [1981], Olson [1982], and Weingast [1993] which also examines the political foundations of economic growth. The residents of the Venetian lagoon established Venice as political unit in 697 and some Genoese organized themselves in a Commune around 1096. Their political institutions were neither identical nor constant over time and hence general statements regarding them are, at best, oversimplifications. Yet, it should be noted that the political systems of Genoa and Venice exhibited
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impersonal exchange without impartial law the community responsibility system
Chicago Journal of International Law, 2004Co-Authors: Avner GreifAbstract:ABSTRACT Impartial legal enforcement provided by the state is considered necessary for impersonal exchange,1 implying that the scope of enforcement determines the extent of the market and hence the division of labor and related efficiency gains. Yet, the development of effective impartial legal systems provided by the state to govern exchange relationships is a rather recent phenomenon. What were, if any, the institutions that enabled impersonal exchange prior to that development? This paper addresses this question by examining the European experience. It utilizes a game theoretic framework and historical analysis to examine the Community Responsibility System ("CRS") that enabled exchange characterized by separation between the quid and the quo over time and space that was impersonal, up to one's community affiliation. The CRS built on self-governed communities, intra-community (partial) enforcement institutions, and non-contractual joint communal liability in inter-community disputes that induced communities to care about their collective reputations. The analysis touches upon issues central to institutions: the optimal size of the legal responsibility unit as a function of different units' ability to identify, monitor, and punish wrongdoers; the endogenous elicitation of impartial justice from partial courts; the role of self-governed organizations that fall between the ways in which we model the state and communities; the complementarities between reputational mechanisms and those relying on coercive power; the importance of the distinction between personal and communal identities; how institutions endogenously determine if agents condition entering an exchange on the revelation of information regarding personal and communal identity or past actions or both; and the importance of overlapping generations' organizations, such as communities, in facilitating inter-organizational impersonal exchange based on reputation despite each individual's finite life span. (JEL Classification: N0, N2, C7.) I. INTRODUCTION Impersonal exchange is central to economic growth; however, we know surprisingly little about the historical development of the institutions that supported it. In considering the institutional foundations of exchange, the economic literature has emphasized reputation-based personal exchange on the one hand and impersonal exchange based on an impartial legal system on the other. Reputation-based institutions support personal exchange by enabling repeatedly interacting economic agents to commit ex ante to adhere to contractual obligations ex post based on the (correct) expectations that misconduct will lead to a loss of future gains from exchange. Law-based institutions support impersonal exchange based on a third-party impartial enforcer with coercive power, ex post verifiability of actions, and legal sanctions.2 Impartial and effective legal systems, however, are a relatively recent development, and, more importantly, impersonal exchange seems to have historically preceded their development. During the Late Medieval Commercial Revolution, long-distance trade substantially expanded, and merchants from different corners of Europe extensively entered into what seems to have been impersonal exchange characterized by a separation between the quid and the quo over time and space: credit, contracts for future delivery, negotiable securities, and maritime insurance are a few examples.' What institutions, if any, facilitated impersonal exchange in the absence of impartial, third-party contract enforcement provided by the state and its legal system? This paper addresses the question by examining the nature and endogenous dynamics of institutions that supported impersonal exchange characterized by a separation in time and space between the quid and the quo in pre-modern Europe from the late medieval period. Addressing this question relates to a central issue in understanding the process of development and the role of contract enforcement institutions in this process. …
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On the Political Foundations of the Late Medieval Commercial Revolution: Genoa During the Twelfth and Thirteenth Centuries
The Journal of Economic History, 1994Co-Authors: Avner GreifAbstract:Although the late medieval Commercial Revolution is considered to be a watershed in the economic history of Europe, the analysis of the interrelationship between political and economic systems in bringing about this period of economic growth has been neglected. This article conducts such an analysis with respect to the city of Genoa during the twelfth and thirteenth centuries. Viewing political institutions as self-enforcing agreements rather than as exogenous rules, I present and analyze the nature and evolution of Genoa's political systems and the relations between these systems and economic growth. T'he economic growth of northern Italy's city-states during the late medieval Commercial Revolution had a lasting impact on the economic development of Europe.' Although the economic aspects of the Commercial Revolution have been examined by Robert Sabatino Lopez and others, the political foundations of this growth, by and large, have been ignored.2 This article sheds light on the political foundations of the Commercial Revolution by examining the relations between economic incentives, political institutions, and economic growth in Genoa, one of the most important Italian city-states. The extent of an Italian city-state's sea-bound trade was determined by its "possessions" around the Mediterranean. These overseas possessions were both tangible and intangible and included ports, houses, customs agreements, legal rights, and so on. Possessions facilitated the expansion of trade by substantially reducing the risk and cost of
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On the Political Foundations of the Late Medieval Commercial Revolution: Genoa During the Twelfth and Thirteenth Centuries
The Journal of Economic History, 1994Co-Authors: Avner GreifAbstract:Although the late medieval Commercial Revolution is considered to be a watershed in the economic history of Europe, the analysis of the interrelationship between political and economic systems in bringing about this period of economic growth has been neglected. This article conducts such an analysis with respect to the city of Genoa during the twelfth and thirteenth centuries. Viewing political institutions as self-enforcing agreements rather than as exogenous rules, I present and analyze the nature and evolution of Genoa's political systems and the relations between these systems and economic growth.
Francesca Trivellato - One of the best experts on this subject based on the ideXlab platform.
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Renaissance Florence and the Origins of Capitalism: A Business History Perspective
Business History Review, 2020Co-Authors: Francesca TrivellatoAbstract:From the 1940s to the 1970s, the Commercial Revolution of the Middle Ages was a historiographical concept with considerable traction. This article revisits the literature that brought about and engaged with that concept, with specific reference to Florence. In so doing, it draws attention to the place once held by business history in the study of Europe's takeoff. It also discusses the preliminary results of an ongoing project on limited partnerships in early modern Tuscany, which reaffirms the relevance of business history for understanding preindustrial economies but steers away from a teleological search for the origins of modern capitalism.
Colin W. P. Smith - One of the best experts on this subject based on the ideXlab platform.
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The Wholesale and Retail Markets of London, 1660-1840
Social Science Research Network, 2003Co-Authors: Colin W. P. SmithAbstract:Markets and marketing are perennial themes in English economic and social history. Yet they remain largely unexplored in relation to London during a period of remarkable growth and change, the long eighteenth century. This article begins to fill that void, by surveying over 70 London produce markets that existed during the period, and identifying patterns in their collective development. It concludes that the physical market place, though ancient in origin, evolved through the ‘Commercial Revolution’ as a highly dynamic and diverse institution that played a significant role in London's distribution.
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The wholesale and retail markets of London, 1660–1840
The Economic History Review, 2002Co-Authors: Colin W. P. SmithAbstract:Markets and marketing are perennial themes in English economic and social history. Yet they remain largely unexplored in relation to London during a period of remarkable growth and change, the long eighteenth century. This article begins to fill that void, by surveying over 70 London produce markets that existed during the period, and identifying patterns in their collective development. It concludes that the physical market place, though ancient in origin, evolved through the ‘Commercial Revolution’ as a highly dynamic and diverse institution that played a significant role in London's distribution.
Noam Yuchtman - One of the best experts on this subject based on the ideXlab platform.
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Medieval Universities, Legal Institutions, and the Commercial Revolution
Social Science Research Network, 2012Co-Authors: Davide Cantoni, Noam YuchtmanAbstract:We present new data documenting medieval Europe’s “Commercial Revolution” using information on the establishment of markets in Germany. We use these data to test whether medieval universities played a causal role in expanding economic activity, examining the foundation of Germany’s first universities after 1386 following the Papal Schism. We find that the trend rate of market establishment breaks upward in 1386 and that this break is greatest where the distance to a university shrank most. There is no differential pre-1386 trend associated with the reduction in distance to a university, and there is no break in trend in 1386 where university proximity did not change. These results are robust to estimating a variety of specifications that address concerns about the endogeneity of university location. Universities provided training in newly-rediscovered Roman and canon law; students with legal training served in positions that reduced the uncertainty of trade in the Middle Ages. We argue that training in the law, and the consequent development of legal and administrative institutions, was an important channel linking universities and greater economic activity in medieval Germany.
Pilar Nogues-marco - One of the best experts on this subject based on the ideXlab platform.
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Handbook of Key Global Financial Markets, Institutions and Infrastructure - Commercial Finance in Europe, 1700–1815
Handbook of Key Global Financial Markets Institutions and Infrastructure, 2013Co-Authors: Clemens Jobst, Pilar Nogues-marcoAbstract:Commercial finance in the eighteenth century was international, yet restricted to a few cities specialized in international trade. The basic instrument of settlement was the bill of exchange that also allowed evading domestic usury regulation. As a result, foreign exchange markets constituted the benchmark money market. A mapping of exchange relations reveals a considerable degree of integration and multilateralism organized around a few leading centers serving as vehicles for international settlements. Commercial interest rates in these centers were low and at comparable levels, suggesting that a transnational capital market resulting from the Commercial Revolution predated the British Financial and Industrial Revolutions of the eighteenth century.
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The Bell Jar: Commercial Interest Rates between Two Revolutions, 1688-1789
Research Papers in Economics, 2006Co-Authors: Marc Flandreau, Christophe Galimard, Clemens Jobst, Pilar Nogues-marcoAbstract:This paper exploits arbitrage conditions for bills of exchange with different maturities to provide new evidence on Commercial interest rates in Amsterdam, London, and Paris during the 18th century. The lesson that emerges is that Commercial interest rates were very low in all three centers and did not differ much from one location to another. This suggests that a transnational capital market resulting from the Commercial Revolution pre-dated to the British 'Financial Revolution' of the 18th century.
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The Origins and Development of Financial Markets and Institutions. From the Seventeenth Century to the Present - The Bell Jar: Commercial Interest Rates between Two Revolutions, 1688-1789
The Origins and Development of Financial Markets and Institutions, 1Co-Authors: Marc Flandreau, Christophe Galimard, Clemens Jobst, Pilar Nogues-marcoAbstract:This paper exploits arbitrage conditions for bills of exchange with different maturities to provide new evidence on Commercial interest rates in Amsterdam, London, and Paris during the 18th century. The lesson that emerges is that Commercial interest rates were very low in all three centers and did not differ much from one location to another. This suggests that a transnational capital market resulting from the Commercial Revolution pre-dated to the British 'Financial Revolution' of the 18th century.