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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," Economic History Working Papers 22307, London School of Economics and Political Science, Department of Economic History.
  • Handle: RePEc:ehl:wpaper:22307
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    File URL: http://eprints.lse.ac.uk/22307/
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    References listed on IDEAS

    as
    1. Lars Boerner & Albrecht Ritschl, 2010. "Communal Responsibility and the Coexistence of Money and Credit Under Anonymous Matching," CEP Discussion Papers dp1034, Centre for Economic Performance, LSE.
    2. Blomquist, Thomas W., 1971. "Commercial Association in Thirteenth-Century Lucca," Business History Review, Cambridge University Press, vol. 45(02), pages 157-178, June.
    3. Volckart, Oliver, 2004. "The economics of feuding in late medieval Germany," Explorations in Economic History, Elsevier, vol. 41(3), pages 282-299, July.
    4. Shavell, S., 1986. "The judgment proof problem," International Review of Law and Economics, Elsevier, vol. 6(1), pages 45-58, June.
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    Cited by:

    1. Christoph Engel & Urs Schweizer, 2009. "Editorial Preface," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(1), pages 1-4, March.
    2. Börner, Lars & Hatfield, John William, 2010. "The economics of debt clearing mechanisms," Discussion Papers 2010/27, Free University Berlin, School of Business & Economics.
    3. Börner, Lars & Quint, Daniel, 2010. "Medieval matching markets," Discussion Papers 2010/31, Free University Berlin, School of Business & Economics.
    4. Aidin Hajikhameneh & Jared Rubin, 2017. "Reputation and Multilateral Punishment under Uncertainty," Working Papers 17-14, Chapman University, Economic Science Institute.
    5. 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

    JEL classification:

    • N0 - Economic History - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • B11 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Preclassical (Ancient, Medieval, Mercantilist, Physiocratic)

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