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Contract Enforcement, Institutions and Social Capital: the Maghribi Traders Reappraised

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  • Edwards, J.
  • Ogilvie, S.

Abstract

Economists draw important lessons for modern development from the medieval Maghribi traders who, it has been argued, enforced contracts collectively through a closed, private-order coalition. We show that this view is untenable. Not a single empirical example adduced as evidence of the putative coalition shows that any coalition actually existed. Furthermore, the Maghribis entered business associations with non-Maghribis and used formal enforcement mechanisms. The Maghribi traders cannot be used to argue that the social capital of exclusive, private-order networks will facilitate exchange in developing economies. Nor do they provide any support for the cultural theories of economic development and institutional change for which they have been mobilised.

Suggested Citation

  • Edwards, J. & Ogilvie, S., 2009. "Contract Enforcement, Institutions and Social Capital: the Maghribi Traders Reappraised," Cambridge Working Papers in Economics 0928, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:0928
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    1. Svendsen, Gunnar Lind Haase & Svendsen, Gert Tinggaard, 2016. "How did trade norms evolve in Scandinavia? Long-distance trade and social trust in the Viking age," Economic Systems, Elsevier, vol. 40(2), pages 198-205.
    2. Maya Shatzmiller, 2022. "Structural change and economic development in the Islamic Middle East 700–1500: Population levels and property rights," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(1), pages 4-22, February.
    3. Sarah Guilland Carmichael & Alexandra de Pleijt & Jan Luiten van Zanden & Tine De Moor, 2015. "Reply to Tracy Dennison and Sheilagh Ogilvie: The European Marriage pattern and the Little Divergence," Working Papers 0070, Utrecht University, Centre for Global Economic History.
    4. Mika Kallioinen, 2017. "Inter‐communal institutions in medieval trade," Economic History Review, Economic History Society, vol. 70(4), pages 1131-1152, November.
    5. Federico, Giovanni & Bisin, Alberto, 2021. "Merger or acquisition? An introduction to the Handbook of Historical economics," CEPR Discussion Papers 15795, C.E.P.R. Discussion Papers.
    6. Alan Benson & Aaron Sojourner & Akhmed Umyarov, 2020. "Can Reputation Discipline the Gig Economy? Experimental Evidence from an Online Labor Market," Management Science, INFORMS, vol. 66(5), pages 1802-1825, May.
    7. Hodgson, Geoffrey M. & Knudsen, Thorbjørn, 2008. "The emergence of property rights enforcement in early trade: A behavioral model without reputational effects," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 48-62, October.
    8. Jeroen Puttevils, 2015. "‘Eating the bread out of their mouth’: Antwerp's export trade and generalized institutions, 1544–5," Economic History Review, Economic History Society, vol. 68(4), pages 1339-1364, November.
    9. Avner Greif, 2008. "Contract Enforcement and Institutions among the Maghribi Traders: Refuting Edwards and Ogilvie," Discussion Papers 08-018, Stanford Institute for Economic Policy Research.
    10. van Bavel, Bas, 2016. "The Invisible Hand?: How Market Economies have Emerged and Declined Since AD 500," OUP Catalogue, Oxford University Press, number 9780199608133.
    11. Mezgebo, Taddese & Dereje, Fikadu, 2010. "Structure, conduct and performance of grain trading in Tigray and its impact on demand for commodity exchange: The case Maychew, Mokone, Alemata, Mekelle and Himora," MPRA Paper 24901, University Library of Munich, Germany.
    12. Ferrali, Romain, 2012. "The Maghribi industrialists: contract enforcement in the Moroccan industry, 1956-82," Economic History Working Papers 45680, London School of Economics and Political Science, Department of Economic History.
    13. Esteves, Rui & Geisler Mesevage, Gabriel, 2019. "Social Networks in Economic History: Opportunities and Challenges," Explorations in Economic History, Elsevier, vol. 74(C).
    14. 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.
    15. Sahle, Esther, 2010. "Re-evaluating the role of voluntary organisations: merchant networks, the Baltic and the expansion of European long-distance trade," Economic History Working Papers 27852, London School of Economics and Political Science, Department of Economic History.
    16. Seidler, Valentin, 2011. "Colonial legacy and institutional development: The cases of Botswana and Nigeria," ÖFSE-Forum, Austrian Foundation for Development Research (ÖFSE), volume 52, number 52.
    17. Mark Koyama, 2020. "A review essay on The European Guilds," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(1), pages 277-287, March.
    18. C. Rowley, 2009. "The curious citation practices of Avner Greif: Janet Landa comes to grief," Public Choice, Springer, vol. 140(3), pages 275-285, September.
    19. Arnoux, Mathieu, 2019. "Ressources renouvelables et croissance économique : suggestions médiévales et questions contemporaines," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 26.
    20. Lydon, Ghislaine, 2009. "A paper economy of faith without faith in paper: A reflection on Islamic institutional history," Journal of Economic Behavior & Organization, Elsevier, vol. 71(3), pages 647-659, September.

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    More about this item

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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