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

Author

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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: https://researchonline.lse.ac.uk/id/eprint/22307/
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    References listed on IDEAS

    as
    1. Volckart, Oliver, 2004. "The economics of feuding in late medieval Germany," Explorations in Economic History, Elsevier, vol. 41(3), pages 282-299, July.
    2. Boerner, Lars & Ritschl, Albrecht, 2010. "Communal responsibility and the coexistence of money and credit under anonymous matching," SFB 649 Discussion Papers 2010-060, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    3. Greif, Avner, 1996. "The Study of Organizations and Evolving Organizational Forms through History: Reflections from the Late Medieval Family Firm," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 5(2), pages 473-501.
    4. Avner Greif, 2002. "Institutions and Impersonal Exchange: From Communal to Individual Responsibility," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(1), pages 168-204, March.
    5. 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:

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    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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