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Social Capital and Collusion: The Case of Merchant Guilds

Roberta Dessi and Sheilagh Ogilvie

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Merchant guilds have been portrayed as ‘social networks’ that generated beneficial ‘social capital’ by sustaining shared norms, effectively transmitting information, and successfully undertaking collective action. This social capital, it is claimed, benefited society as a whole by enabling rulers to commit to providing a secure trading environment for alien merchants. But was this really the case? We develop a new model of the emergence, rise and eventual decline of European merchant guilds which explores the collusive relationship between rulers and guilds, and calls into question the prevailing positive view of merchant guilds. We then confront the model’s predictions with the available historical data. The empirical evidence strongly support our model and refutes existing theories. Our findings show that merchant guilds used their social capital for socially harmful as well as beneficial ends.

Keywords: merchant guilds; collusion; social capital; social networks; monopoly (search for similar items in EconPapers)
JEL-codes: N73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-net
Date: 2004-03
Note: EH
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Working Paper: Social Capital and Collusion: The Case of Merchant Guilds (2003) Downloads
Working Paper: Social Capital and Collusion: The Case of Merchant Guilds (2003) Downloads
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