Debates on institutions for collective action in general

How important are institutions for collective action for economic development?

 

Over the past decennia economic historians have increasingly realised that institutions play an important role in organizing production and exchange (North 1990), and that corporations were fundamental in developing and transforming these 'rules of the game'. In his seminal work on merchant guilds Greif, for example, sees the formation of these guilds in the Late Middle Ages as the distinguishing moment in European economic development. Guilds underpinned the ‘community responsibility system’ according to which communities (i.e. towns) threatened to boycott each other if individual members of these communities did not honour their obligations (for example defaulted on their debts) (Greif 2005; see also Greif, Milgrom, and Weingast 1994). This laid the foundation for the institutional development of Western Europe in later periods as well.

Others have stressed the role guilds played in the transfer of technology (Epstein 1998; van Zanden 2004a; Prak 2004). More in general, recent social and economic-historical historiography has seen a remarkable ‘return of the guilds’, thanks to detailed work on the actual operation and development of these institutions (Prak, Lis, Lucassen, and Soly 2006). Each of these lines of research tackle a different aspect of economic development.

 

 

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