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

Boerner, Lars and Ritschl, Albrecht (2009) The economic history of sovereignty: communal responsibility, the extended family, and the firm. Journal of Institutional and Theoretical Economics, 165 (1). pp. 99-112. ISSN 0932-4569

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Abstract

Economic institutions encompassing increasingly sophisticated concepts of risk-sharing and liability flourished in Europe beginning in 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, Kraakman, and Squire [2006] arose endogenously and is not primarily the result of regulation by local authorities.

Item Type: Article
Official URL: http://www.mohr.de/en/journals/economics/journal-o...
Additional Information: © 2009 Mohr Siebeck
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
Sets: Departments > Economic History
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 02 Dec 2009 10:09
URL: http://eprints.lse.ac.uk/25989/

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