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The economic history of sovereignty: communal responsibility, the extended family, and the firm

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  • Boerner, Lars
  • Ritschl, Albrecht

Abstract

Economic institutions encompassing increasingly sophisticated concepts of risk-sharing and liability flourished in Europe since 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 et al. (2006) arose endogenously and is not primarily the result of regulation by local authorities.

Suggested Citation

  • Boerner, Lars & Ritschl, Albrecht, 2008. "The economic history of sovereignty: communal responsibility, the extended family, and the firm," LSE Research Online Documents on Economics 22307, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:22307
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    1. Blomquist, Thomas W., 1971. "Commercial Association in Thirteenth-Century Lucca," Business History Review, Cambridge University Press, vol. 45(2), pages 157-178, July.
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    Cited by:

    1. Madsen, Jakob B. & Robertson, Peter E. & Ye, Longfeng, 2024. "Lives versus livelihoods in the middle ages: The impact of the plague on trade over 400 years," European Economic Review, Elsevier, vol. 162(C).
    2. Lars Boerner & Daniel Quint, 2023. "Medieval Matching Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 23-56, February.
    3. Christoph Engel & Urs Schweizer, 2009. "Editorial Preface," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(1), pages 1-4, March.
    4. Börner, Lars & Hatfield, John William, 2010. "The economics of debt clearing mechanisms," Discussion Papers 2010/27, Free University Berlin, School of Business & Economics.
    5. repec:ehl:wpaper:66833 is not listed on IDEAS
    6. Aidin Hajikhameneh & Jared Rubin, 2019. "Exchange in the Absence of Legal Enforcement: Reputation and Multilateral Punishment under Uncertainty," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 35(1), pages 192-237.
    7. Hajikhameneh, Aidin, 2024. "Reputation or court: Individualism, collectivism, and the choice of enforcement mechanism in exchange," Journal of Economic Behavior & Organization, Elsevier, vol. 217(C), pages 184-206.

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      JEL classification:

      • N0 - Economic History - - General

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