PA.181 | The institutional foundations of long-distance trade before industrialization: diversity and change
Ever since the days of Adam Smith, it has been recognized that an enhanced ability to exchange promotes economic growth. Yet we know surprisingly little about how distinct institutional systems, each conformed by a plurality of elements, such as beliefs, values, rules and organizations, can theoretically and did historically govern the fundamental problem of exchange â€” one will not enter into an objectively profitable exchange relationship unless the other party can credibly commit ex-ante not to breach his contractual obligations ex-post. Furthermore, we are equally ignorant about how these distinct institutional systems, each with different efficiency and distributional implications, emerged and evolved reflecting broader social, political and cultural processes of which they were an integral part.
This session will explore the nature and the dynamics of the various institutions for contract enforcement that supported trade expansion before industrialization. Rooted on a comparative and historical analysis, it seeks to understand institutional diversity and change. It aims to examine empirically how and to what degree of effectiveness diverse institutional systems and elements (public and private, formal and informal, legal and extra-legal) mitigated opportunism and information asymmetry across regions and over time. It also aims to explore how past institutions shaped a society's rate and direction of change, and hence historically explain the diversity in economic development we observe on a global scale. We would prefer having a double session, as we have commitments for five papers and one discussant, and would like to run an open call to up to four other papers. We encourage both economists and historians to apply and engage into a challenging yet inspiring dialogue. Although the call will consider papers covering all parts of the world, proposals relating to Asia, Africa and Eastern Europe will be particularly welcome.