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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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    References listed on IDEAS

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    1. Harbord, David, 2006. "Enforcing cooperation among medieval merchants: The Maghribi traders revisited," MPRA Paper 1889, University Library of Munich, Germany.
    2. Dora L. Costa & Matthew E. Kahn, 2007. "Surviving Andersonville: The Benefits of Social Networks in POW Camps," American Economic Review, American Economic Association, vol. 97(4), pages 1467-1487, September.
    3. Gerald P. O'Driscoll Jr. & Lee Hoskins, 2006. "The Case for Market-Based Regulation," Cato Journal, Cato Journal, Cato Institute, vol. 26(3), pages 469-487, Fall.
    4. Clay, Karen, 1997. "Trade without Law: Private-Order Institutions in Mexican California," Journal of Law, Economics, and Organization, Oxford University Press, vol. 13(1), pages 202-231, April.
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    Cited by:

    1. Greif, Avner, 2008. "Contract enforcement and institutions among the Maghribi Traders: Refuting Edwards and Ogilvie," MPRA Paper 9610, University Library of Munich, Germany.
    2. 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.
    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. 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.
    5. Benson, Alan & Sojourner, Aaron J. & Umyarov, Akhmed, 2015. "Can Reputation Discipline the Gig Economy? Experimental Evidence from an Online Labor Market," IZA Discussion Papers 9501, Institute for the Study of Labor (IZA).
    6. 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.
    7. 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.
    8. 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.
    9. van Bavel, Bas, 2016. "The Invisible Hand?: How Market Economies have Emerged and Declined Since AD 500," OUP Catalogue, Oxford University Press, number 9780199608133.
    10. 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.
    11. 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.
    12. 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.

    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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