The Economic History of Sovereignty: Communal Responsibility, the Extended Family, and the Firm
AbstractEconomic institutions encompassing increasingly sophisticated concepts of risksharing and liability flourished in Europe beginning in the High Middle Ages. These innovations occurred in an environment of fragmented local jurisdictions, not within the framework of the territorial state. In this short paper we attempt to sketch a unifying approach towards the interpretation of the emergence of these institutions. We argue that communal responsibility in medieval city-states created incentives for excessive risk-taking by individual merchants, and that the emergence of firms mitigated this problem. We also find that entity shielding in the sense of HANSMANN, KRAAKMAN, AND SQUIRE  arose endogenously and is not primarily the result of regulation by local authorities.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.
Volume (Year): 165 (2009)
Issue (Month): 1 (March)
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Web page: http://www.mohr.de/jite
Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
Other versions of this item:
- Boerner, Lars & Ritschl, Albrecht, 2008. "The economic history of sovereignty: communal responsibility, the extended family, and the firm," Economic History Working Papers 22307, London School of Economics and Political Science, Department of Economic History.
- N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- D14 - Microeconomics - - Household Behavior - - - Personal Finance
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- Börner, Lars & Quint, Daniel, 2010. "Medieval matching markets," Discussion Papers 2010/31, Free University Berlin, School of Business & Economics.
- Börner, Lars & Hatfield, John William, 2010. "The economics of debt clearing mechanisms," Discussion Papers 2010/27, Free University Berlin, School of Business & Economics.
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