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The Institutions of Roman Markets

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  • Benito Arruñada

Abstract

I analyze the basis of the market economy in classical Rome, from the perspective of personal-versus-impersonal exchange and focusing on the role of the state in providing market-enabling institutions. I start by reviewing the central conflict in all exchanges between those holding and those acquiring property rights, and how solving it requires reducing information asymmetry without endangering the security of property. Relying on a model of the social choice of institutions, I identify the demand and supply factors driving the institutional choices made by the Romans, and examine the economic circumstances that influenced these factors in the classical period of Roman law. Comparing the predictions of the model with the main solutions used by Roman law in the areas of property, business exchange and the enforcement of personal obligations allows me to propose alternative interpretations for some salient institutions that have been subject to controversy in the literature, and to conclude with an overall positive assessment of the market-enabling role of the Roman state.

Suggested Citation

  • Benito Arruñada, 2015. "The Institutions of Roman Markets," Working Papers 813, Barcelona Graduate School of Economics.
  • Handle: RePEc:bge:wpaper:813
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    References listed on IDEAS

    as
    1. M. Fleurbaey., 2012. "Beyond GDP: The Quest for a Measure of Social Welfare," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 3.
    2. Pedro Pita Barros & Nuno Garoupa, 2002. "An Economic Theory Of Church Strictness," Economic Journal, Royal Economic Society, vol. 112(481), pages 559-576, July.
    3. Arrunada, Benito & Garicano, Luis & Vazquez, Luis, 2001. "Contractual Allocation of Decision Rights and Incentives: The Case of Automobile Distribution," Journal of Law, Economics, and Organization, Oxford University Press, vol. 17(1), pages 257-284, April.
    4. Benito Arruñada, 2010. "Institutional support of the firm: A theory of business registries," Economics Working Papers 1195, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2010.
    5. Peter Temin, 2006. "The Economy of the Early Roman Empire," Journal of Economic Perspectives, American Economic Association, pages 133-151.
    6. Laiou,Angeliki E. & Morrisson,Cécile, 2007. "The Byzantine Economy," Cambridge Books, Cambridge University Press, number 9780521615020, December.
    7. Laiou,Angeliki E. & Morrisson,Cécile, 2007. "The Byzantine Economy," Cambridge Books, Cambridge University Press, number 9780521849784, December.
    8. Benito Arruñada, 2010. "Institutional support of the firm: A theory of business registries," Economics Working Papers 1195, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2010.
    9. Benito ArruÒada, 2003. "Property Enforcement as Organized Consent," Journal of Law, Economics, and Organization, Oxford University Press, vol. 19(2), pages 401-444, October.
    10. Koyama, Mark, 2010. "Evading the 'Taint of Usury': The usury prohibition as a barrier to entry," Explorations in Economic History, Elsevier, vol. 47(4), pages 420-442, October.
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    More about this item

    Keywords

    Property rights; enforcement; transaction costs; registries; Roman law; impersonal exchange; personal exchange; New Institutional Economics; Law and Economics;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K36 - Law and Economics - - Other Substantive Areas of Law - - - Family and Personal Law
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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