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

Lars Boerner and Albrecht Ritschl

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

JEL-codes: N0 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2008-10
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http://eprints.lse.ac.uk/22307/ Open access version. (application/pdf)

Related works:
Journal Article: The Economic History of Sovereignty: Communal Responsibility, the Extended Family, and the Firm (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:22307

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