Village Communities as Cartels: Problems of Collective Action and their Solutions in Medieval and Early Modern Central Europe

Oliver Volckart

Homo Oeconomicus, 2004, vol. 21, 21-40

Abstract: In this paper, the causes of both the development and stability of medieval and early modern village communities in Central Europe are analysed. The hypothesis is that these organisations had the function of cartels. As is widely accepted, cartels are inherently unstable, suffering from free-riding and defection. Volckart shows that in the case of the communities examined in this essay, the problem of collective action was solved with the help of positive and negative sanctions, whose provision, in turn, posed similar free-rider problems. This second-order dilemma of co-operation was overcome because village communities were socially heterogeneous, the wealthier members whose market quota was larger having not only a stronger interest in the stability of the cartel, but being willing and able to supply the necessary sanctions. On the basis of this hypothesis, the study isolates a number of factors which determined the effectiveness of rural communities.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:hom:homoec:v:21:y:2004:p:21-40

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