The Maghribi industrialists: contract enforcement in the Moroccan industry, 1956-82
Original oral history data shows that during the import-substituting industrialisation, state capitalist period delimited by the independence in 1956 and the structural adjustment program in 1982, Moroccan manufacturers were operating in an environment characterised by a high risk of contractual breach, and by long-term, face-to-face relationships with few trade partners. The judicial system was seldom used to enforce contracts, because it was dysfunctional, and would break up a valuable relationship. To avoid contractual problems, entrepreneurs were largely relying on their acquaintances: economic life was embedded in social life. Social capital was derived from the business network and social connections rather than from connections with the state, kin-based and ethno-geographic groups. Private enforcement does not work as the Maghribi traders suggest. It is a way of screening customers and suppliers based on on-demand, reciprocal exchange of imprecise information, rather than a way of inflicting collective punishment. Its efficiency depends on the structure of the business network and on the individual social capital that agents hold within this structure. The institutional environment deteriorated after the period, because an increased number of players disrupted the structure of the business network and decreased the efficiency of private enforcement.
|Date of creation:||Aug 2012|
|Contact details of provider:|| Postal: LSE, Dept. of Economic History Houghton Street London, WC2A 2AE, U.K.|
Phone: +44 (0) 20 7955 7084
Web page: http://www.lse.ac.uk/economicHistory/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Okazaki, Tetsuji, 2005.
"The role of the merchant coalition in pre-modern Japanese economic development: an historical institutional analysis,"
Explorations in Economic History,
Elsevier, vol. 42(2), pages 184-201, April.
- Tetsuji Okazaki, 2001. "The Role of the Merchant Coalition in Premodern Japanese Economic Development: An Historical Institutional Analysis," CIRJE F-Series CIRJE-F-116, CIRJE, Faculty of Economics, University of Tokyo.
- Tetsuji Okazaki, 2004. "The Role of the Merchant Coalition in Pre-modern Japanese Economic Development: An Historical Institutional Analysis," CIRJE F-Series CIRJE-F-268, CIRJE, Faculty of Economics, University of Tokyo.
- Tetsuji Okazaki, 2004. "The Role of the Merchant Coalition in Pre-modern Japanese Economic Development: An Historical Institutional Analysis," CIRJE F-Series CIRJE-F-284, CIRJE, Faculty of Economics, University of Tokyo.
- Paul R. Milgrom & Douglass C. North & Barry R. Weingast, 1990. "The Role Of Institutions In The Revival Of Trade: The Law Merchant, Private Judges, And The Champagne Fairs," Economics and Politics, Wiley Blackwell, vol. 2(1), pages 1-23, 03.
- Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-554, May.
- Fafchamps, Marcel, 1996. "The enforcement of commercial contracts in Ghana," World Development, Elsevier, vol. 24(3), pages 427-448, March.
- Jeremy Edwards & Sheilagh Ogilvie, 2012. "Contract enforcement, institutions, and social capital: the Maghribi traders reappraised," Economic History Review, Economic History Society, vol. 65(2), pages 421-444, 05.
- Jeremy Edwards & Sheilagh Ogilvie, 2008. "Contract Enforcement, Institutions and Social Capital: the Maghribi Traders Reappraised," CESifo Working Paper Series 2254, CESifo Group Munich.
- 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.
- Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
- Timur Kuran, 2011. "The Long Divergence: How Islamic Law Held Back the Middle East," Economics Books, Princeton University Press, edition 1, number 9273.
- Beckmann, Volker & Boger, Silke, 2004. "Courts and contract enforcement in transition agriculture: theory and evidence from Poland," Agricultural Economics, Blackwell, vol. 31(2-3), pages 251-263, December.
- Beckmann, Volker & Boger, Silke, 2003. "Courts And Contract Enforcement In Transition Agriculture: Theory And Evidence From Poland," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25878, International Association of Agricultural Economists.
- Marcel Fafchamps, 2004. "Market Institutions in Sub-Saharan Africa: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062364, January.
- Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Cathy Patillo & Måns Soderbom & Francis Teal & Albert Zeufack, 2000. "Contract flexibility and dispute resolution in African manufacturing," Journal of Development Studies, Taylor & Francis Journals, vol. 36(4), pages 1-37.
- Arne Bigsten & Paul Collier & Stefan Dercon & Marcel Fafchamps & Bernard Gauthier & Jan Willem Gunning & Abena Oduro & Remco Oostendorp & Cathy Patillo & Måns Söderbom & Francis Teal & Albert Zeufack, 1999. "Contract Flexibility and Dispute Resolution in African Manufacturing," CSAE Working Paper Series 1999-20, Centre for the Study of African Economies, University of Oxford.
- Woodruff, Christopher, 1998. "Contract enforcement and trade liberalization in Mexico's footwear industry," World Development, Elsevier, vol. 26(6), pages 979-991, June.
- Abhijit V. Banerjee & Esther Duflo, 2000. "Reputation Effects and the Limits of Contracting: A Study of the Indian Software Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 989-1017.
- Telser, L G, 1980. "A Theory of Self-enforcing Agreements," The Journal of Business, University of Chicago Press, vol. 53(1), pages 27-44, January.
- Williamson, Oliver E, 1981. "The Modern Corporation: Origins, Evolution, Attributes," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1537-1568, December.
- Edwards, Jeremy & Ogilvie, Sheilagh, 2012. "What lessons for economic development can we draw from the Champagne fairs?," Explorations in Economic History, Elsevier, vol. 49(2), pages 131-148.
- Jeremy Edwards & Sheilagh Ogilvie, 2011. "What Lessons for Economic Development Can We Draw from the Champagne Fairs?," CESifo Working Paper Series 3438, CESifo Group Munich.
- Guanghua Yu & Hao Zhang, 2008. "Adaptive Efficiency and Financial Development in China: The Role of Contracts and Contractual Enforcement," Journal of International Economic Law, Oxford University Press, vol. 11(2), pages 459-494, June.
- John Shuhe Li, 2003. "Relation-based versus Rule-based Governance: an Explanation of the East Asian Miracle and Asian Crisis," Review of International Economics, Wiley Blackwell, vol. 11(4), pages 651-673, September.
- Michihiro Kandori, 1992. "Social Norms and Community Enforcement," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 63-80. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ehl:wpaper:45680. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LSERO Manager on behalf of EH Dept.)
If references are entirely missing, you can add them using this form.