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Principle-agent problems in the French slave trade: the case of Rochelais Armateurs and their agents, 1763-1792

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  • Forestier, Albane

Abstract

La Rochelle, the fourth largest slaving port in France in the eighteenth-century, is used as a case study in the application of agency theory to long-distance trade. This analysis explores an area not accounted for in the literature on French commercial practices. Being broadly couched in a New Institutionalist framework, this study explores the formal and informal institutions designed to curb agency problems, and emphasizes the ex-post strategies such as social rewarding, to which little attention is usually paid. It also finds reputation-effect strategies were efficiently combined with a well-operating legal system. It subsequently challenges the traditional dichotomy between societies where personal links dominated the economy and modern societies where business links are predominantly impersonal. As a result, this empirical analysis leads to a reappraisal of private ordering as opposed to legal centralism and calls for more theoretical research.

Suggested Citation

  • Forestier, Albane, 2005. "Principle-agent problems in the French slave trade: the case of Rochelais Armateurs and their agents, 1763-1792," Economic History Working Papers 22478, London School of Economics and Political Science, Department of Economic History.
  • Handle: RePEc:ehl:wpaper:22478
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    File URL: http://eprints.lse.ac.uk/22478/
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    References listed on IDEAS

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    1. Wintrobe, Ronald & Breton, Albert, 1986. "Organizational Structure and Productivity," American Economic Review, American Economic Association, vol. 76(3), pages 530-538, June.
    2. Greif, Avner, 1998. "Historical and Comparative Institutional Analysis," American Economic Review, American Economic Association, vol. 88(2), pages 80-84, May.
    3. Greif, Avner, 1989. "Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 857-882, December.
    4. Carlos, Ann M, 1992. "Principal-Agent Problems in Early Trading Companies: A Tale of Two Firms," American Economic Review, American Economic Association, vol. 82(2), pages 140-145, May.
    5. Carlos, Ann M. & Nicholas, Stephen, 1990. "Agency Problems in Early Chartered Companies: The Case of the Hudson’s Bay Company," The Journal of Economic History, Cambridge University Press, vol. 50(04), pages 853-875, December.
    6. MacLeod, W Bentley & Malcomson, James M, 1988. "Reputation and Hierarchy in Dynamic Models of Employment," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 832-854, August.
    7. Eaton, B Curtis & White, William D, 1982. "Agent Compensation and the Limits of Bonding," Economic Inquiry, Western Economic Association International, vol. 20(3), pages 330-343, July.
    8. Allen, Douglas W., 2002. "The British Navy Rules: Monitoring and Incompatible Incentives in the Age of Fighting Sail," Explorations in Economic History, Elsevier, vol. 39(2), pages 204-231, April.
    9. Carlos Ann M., 1994. "Bonding and the Agency Problem: Evidence from the Royal African Company, 1672-1691," Explorations in Economic History, Elsevier, vol. 31(3), pages 313-335, July.
    10. Eltis David & Richardson David, 1995. "Productivity in the Transatlantic Slave Trade," Explorations in Economic History, Elsevier, vol. 32(4), pages 465-484, October.
    11. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-950, October.
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    More about this item

    JEL classification:

    • N0 - Economic History - - General
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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