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Club goods and inefficient institutions: why Danzig and Lübeck failed in the early modern period

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  • ERIK LINDBERG

Abstract

This article uses club theory to explain why two major medieval commercial centres declined in the early modern period. Lübeck and Danzig illuminate the difficulties experienced by old‐style European towns where early modern guilds (and other privileged ‘corporations’) had a lot of political influence in making the transition to the new style of north‐west European cities such as Amsterdam and Hamburg. The article refutes theories proposing that the special privileges awarded to a merchant elite enhanced economic growth; instead, it is argued that those privileges gave rise to ‘club goods’ that were beneficial only to a small number of merchants and were provided at the expense of society at large, resulting in economic decline.

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  • Erik Lindberg, 2009. "Club goods and inefficient institutions: why Danzig and Lübeck failed in the early modern period," Economic History Review, Economic History Society, vol. 62(3), pages 604-628, August.
    • Handle: RePEc:bla:ehsrev:v:62:y:2009:i:3:p:604-628
    DOI: 10.1111/j.1468-0289.2009.00469.x
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    Cited by:

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    2. Dessí, Roberta & Piccolo, Salvatore, 2016. "Merchant guilds, taxation and social capital," European Economic Review, Elsevier, vol. 83(C), pages 90-110.
    3. Alexander Donges & Jean-Marie Meier & Rui C. Silva, 2023. "The Impact of Institutions on Innovation," Management Science, INFORMS, vol. 69(4), pages 1951-1974, April.
    4. Alexander Fink, 2012. "The Hanseatic League and the Concept of Functional Overlapping Competing Jurisdictions," Kyklos, Wiley Blackwell, vol. 65(2), pages 194-217, May.
    5. Wolfgang Keller & Carol H. Shiue, 2020. "Market integration and institutional change," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(2), pages 251-285, May.
    6. Sheilagh Ogilvie, 2014. "The Economics of Guilds," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 169-192, Fall.
    7. Clark, Gregory, 2014. "The Industrial Revolution," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 217-262, Elsevier.
    8. Keller, Wolfgang & Shiue, Carol, 2016. "Market Integration as a Mechanism of Growth," CEPR Discussion Papers 11627, C.E.P.R. Discussion Papers.
    9. David Dolejší, 2022. "Feudal bargain in Prague: The rise, spread, and fall of craft guilds," Rationality and Society, , vol. 34(2), pages 237-267, May.
    10. Ogilvie, Sheilagh & Carus, A.W., 2014. "Institutions and Economic Growth in Historical Perspective," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 8, pages 403-513, Elsevier.
    11. Thomas Leng, 2016. "Interlopers and disorderly brethren at the Stade Mart: commercial regulations and practices amongst the Merchant Adventurers of England in the late Elizabethan period," Economic History Review, Economic History Society, vol. 69(3), pages 823-843, August.

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