Between the constitution and the deep blue sea: Contractual controls on opportunism aboard pirate vessels

Gary Anderson and Adam Gifford

Constitutional Political Economy, 1996, vol. 7, issue 1, 49-61

Abstract: When contracting is costly, members of a production team will seek assurance that the transaction-pecific investments they make will be protected. The institutional framework created by a firm in such a setting can be considered a constitution. Under some circumstances, firms will create explicit written constitutions. The constitutions of pre-1850 privateer and pirate vessels provide two examples of actual written constitutions. These constitutions were designed to resolve the problems of contractual opportunism created by the specific investments of the crewmembers. Privateering was a legal and state-sanctioned activity whereas pirates engaged in illegal activities; aside from this difference their activities were virtually identical. This contrast allows for the examination of an interesting question: specifically, what effect does the constitutional backup provided by the state have on the constitutional structure of the firm? Copyright Kluwer Academic Publishers 1996

Keywords: D23 (search for similar items in EconPapers)
Date: 1996
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DOI: 10.1007/BF00143479

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