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How Rome enabled impersonal markets

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Abstract

Impersonal exchange increases trade and specialization opportunities, encouraging economic growth. However it requires the support of sophisticated public institutions. This paper explains how Classical Rome provided such support in the main areas of economic activity by relying on public possession as a titling device, enacting rules to protect innocent acquirers in agency contexts, enabling the extended family to act as a contractual entity, and diluting the enforcement of personal obligations which might collide with impersonal exchange. Focusing on the institutions of impersonal exchange, it reaches a clear positive conclusion on the market-facilitating role of the Roman state because such institutions have unambiguously positive effects on markets. Moreover, being impersonal, these beneficial effects are also widely distributed across society instead of accruing disproportionately to better-connected individuals.

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  • Benito Arruñada, 2016. "How Rome enabled impersonal markets," Economics Working Papers 1509, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:1509
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    More about this item

    Keywords

    property rights; enforcement; transaction costs; Roman law; impersonal exchange; personal exchange; New Institutional Economics; Law and Economics.;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K36 - Law and Economics - - Other Substantive Areas of Law - - - Family and Personal Law
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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