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Social Capital and Collusion: The Case of Merchant Guilds

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  • Dessi, R.
  • Ogilvie, S.

Abstract

Merchant guilds have been portrayed as ‘social networks’ that generated beneficial ‘social capital’ by sustaining shared norms, effectively transmitting information, and successfully undertaking collective action. This social capital, it is claimed, benefited society as a whole by enabling rulers to commit to providing a secure trading environment for alien merchants. But was this really the case? We develop a new model of the emergence, rise and eventual decline of European merchant guilds which explores the collusive relationship between rulers and guilds, and calls into question the prevailing positive view of merchant guilds. We then confront the model’s predictions with the available historical data. The empirical evidence strongly support our model and refutes existing theories. Our findings show that merchant guilds used their social capital for socially harmful as well as beneficial ends.

Suggested Citation

  • Dessi, R. & Ogilvie, S., 2004. "Social Capital and Collusion: The Case of Merchant Guilds," Cambridge Working Papers in Economics 0417, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0417
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    References listed on IDEAS

    as
    1. Oliver Volckart & Antje Mangels, 1999. "Are the Roots of the Modern Lex Mercatoria Really Medieval?," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 427-450, January.
    2. Ogilvie, Sheilagh, 2003. "A Bitter Living: Women, Markets, and Social Capital in Early Modern Germany," OUP Catalogue, Oxford University Press, number 9780198205548.
    3. Roberta Dessí & Sheilagh Olgivie, 2003. "Social Capital and Collusion: The Case of Merchant Guilds," CESifo Working Paper Series 1037, CESifo Group Munich.
    4. Joel Sobel, 2002. "Can We Trust Social Capital?," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 139-154, March.
    5. Lopez, Robert Sabatino, 1943. "European Merchants in the Medieval Indies: The Evidence of Commercial Documents," The Journal of Economic History, Cambridge University Press, vol. 3(02), pages 164-184, November.
    6. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
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    Cited by:

    1. Roberta Dessì & Salvatore Piccolo, 2008. "Two is Company, N is a Crowd? Merchant Guilds and Social Capital," CSEF Working Papers 202, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 12 Jul 2009.
    2. Larrain Aylwin, M.J. & Prüfer, J.O., 2014. "Business Associations, Lobbying, and Endogenous Institutions," Discussion Paper 2014-071, Tilburg University, Center for Economic Research.
    3. repec:kap:jbuset:v:143:y:2017:i:2:d:10.1007_s10551-015-2765-3 is not listed on IDEAS
    4. Dessi, Roberta & Ogilvie, Sheilagh, 2003. "Social Capital and Collusion : The Case of Merchant Guilds," IDEI Working Papers 214, Institut d'Économie Industrielle (IDEI), Toulouse.
    5. Dessí, Roberta & Piccolo, Salvatore, 2016. "Merchant guilds, taxation and social capital," European Economic Review, Elsevier, vol. 83(C), pages 90-110.
    6. Sheilagh Ogilvie, 2007. "'Whatever Is, Is Right'?, Economic Institutions in Pre-Industrial Europe (Tawney Lecture 2006)," CESifo Working Paper Series 2066, CESifo Group Munich.
    7. Ogilvie, Sheilagh & Carus, A.W., 2014. "Institutions and Economic Growth in Historical Perspective," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 8, pages 403-513 Elsevier.
    8. Pacala Anca, 2016. "The Modern Enterprise - Successor of Business Organization Forms in Ancient Rome and Medieval Europe," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 7-16, March.

    More about this item

    Keywords

    merchant guilds; collusion; social capital; social networks; monopoly;

    JEL classification:

    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913

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