Contract enforcement and institutions among the Maghribi Traders: Refuting Edwards and Ogilvie

Greif, Avner (2008): Contract enforcement and institutions among the Maghribi Traders: Refuting Edwards and Ogilvie.

Abstract

Edwards and Ogilvie (2008) dispute the empirical basis for the view (Greif, e.g., 1989, 1994,2006) that multilateral reputation mechanism mitigated agency problems among the eleventh-century Maghribi traders. They assert that the relations among merchants and agents were law-based. This paper refutes this assertion using quantitative and documentary evidence thereby vindicating the position that the legal system had a marginal role in mitigating agency problems in long-distance trade in this historical era. Edwards and Ogilvie constantly present legal actions in non-trade related legal cases as evidence for a reliance on the legal system for matters pertaining to long-distance trade. Their criticism of Greif’s documentary analysis also fails scrutiny. The claim that merchants' relations with their overseas agents were law-based is wrong. This paper is based on quantitative analyses of the corpuses containing the hundreds of documents on which the literature relies and a careful review of the documents and the literature Edwards and Ogilvie cite. Their assertion is shown to be based on unrepresentative and irrelevant examples, an inaccurate description of the literature, and a consistent misreading of the few sources they consulted. In particular, their examples for the use of the court are mainly taken from mandatory legal procedures associated with sorting out the assets and liabilities of deceased traders’ estates. Such examples do not support the claim that agency relations were law-based. The quantitative analysis reveals that empirical basis for the multilateral reputation view is stronger than originally perceived. This paper also sheds light on the roles of the legal system and reputation mechanism during this period.

• Item Type: MPRA Paper
• Language: English
• Keywords: institutions; contract-enforcement; reputation; Maghribi traders; agency relations
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B52 - Institutional ; Evolutionary; N - Economic History > N2 - Financial Markets and Institutions > N25 - Asia including Middle East

References

Ackerman-Lieberman, Phillip Isaac. 2007. A Partnership Culture Jewish Economic and Social Life Seen Through The Legal Documents of the Cairo Geniza. Phd Dissertation. Princeton University.

Bareket, E. 1998. “Books of Records of the Jerusalemite Court from the ‘Cairo Geneza’ in the first half of the eleventh-century [in Hebrew]. Union College Annual, Vol 69, 228-282. Cincinnati: Hebrew Union College.

Ben-Sasson, Menahem. 1991. The Jews of Sicily, 825-1068. Hebrew and Judeo-Arabic. Jerusalem: Ben-Zevi Institute.

Clay, Karen. 1997. “Trade Without Law: Private-Order Institutions in Mexican California.” Journal of Law, Economics, and Organization, Vol. 13(1): 202-31.

Edwards, J. and S. Ogilvie, 2008. “Contract Enforcement, Institutions and Social Capital: the Maghribi Traders Reappraised.” Cesifo Working Paper No. 2254

Gil, Moshe. 1983. Palestine During the First Muslim Period (634-1099) [in Hebrew and Arabic]. Tel Aviv: Ministry of Defense Press and Tel Aviv University Press.

Gil, Moshe. 1997. In the Kingdom of Ishmael [in Hebrew]. 4 vols. Tel Aviv: Tel Aviv University.

Gil, Moshe. 2003. “The Jewish Merchants in the Light of Eleventh-Century Geniza Documents.” Journal of the economic and social history of the Orient, 46(3), pp. 273-319.

Gil, Moshe. 2004. Jews in Islamic Countries in the Middle Ages. Leiden: Brill

Gil, Moshe. 2004a. “Institutions and Events of the Eleventh Century Mirrored in Geniza Letters (Part I).” Bulletin of the School of Oriental and African Studies, 67(2), pp. 151–167.

Goldberg, Jessica. 2005. Geographies of Trade and Traders in the Eleventh-Century Mediterranean: A Study Based on Documents from the Cairo Geniza. Phd Dissertation. Columbia University.

Goitein, S. D. 1967. A Mediterranean Society: The Jewish Communities of the Arab World as Portrayed in the Documents of the Cairo Geniza, Vol. 1: Economic Foundations. Berkeley / Los Angeles: University of California Press.

Goitein, Shelomo Dov. 1971. A Mediterranean Society: The Community. Los Angeles: University of California Press.

Goitein, S. D. 1973. Letters of Medieval Jewish Traders. Princeton, NJ: Princeton University Press.

Greif, Avner. 1985. "Sicilian Jews during the Muslim Period (827-1061)” (in Hebrew and Arabic). M.A. thesis, Tel Aviv University.

Greif, Avner. 1989. “Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders.” Journal of economic history, 49(4), pp. 857-82.

Greif, Avner. 1993. “Contract Enforceability and Economic Institutions in Early Trade: The Maghribi Traders’ Coalition.” American economic review, 83(3), pp. 525-48.

Greif, Avner. 1994. “Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies.” Journal of political economy, 102(5), pp. 912-50.

Greif, Avner. 1996. On the Study of Organizations and Evolving Organizational Forms Through History: Reflection from the Late Medieval Family Firm." Industrial and Corporate Change, vol. 5 (2): 473-501.

Grief, Avner. 1997. "Contracting, Enforcement, and Efficiency: Economics beyond the Law." In Michael Bruno and Boris Pleskovic (eds.), Annual World Bank Conference on Development Economics, 239-66. Washington, DC: World Bank.

Greif, Avner. 2005. “Commitment, Coercion, and Markets: The Nature and Dynamics of Institutions Supporting Exchange,” in the Handbook for New Institutional Economics. Edited by C. Menard and MM. Shirley. Chapter 28.

Greif, Avner. 2006. Institutions and the Path to the Modern Economy: Lessons from Medieval Trade. Cambridge: Cambridge University Press.

Khalilieh, Hassan S . 2006. “Legal Aspects from a Cairo Geniza Responsum on the Islamic Law of the Sea: Practice and Theory.” The Jewish Quarterly Review, Vol. 96, No. 2, pp. 180–202.

Stillman, Norman Arthur. 1970. "East-West Relations in the Islamic Mediterranean in the Early Eleventh Century." Ph.D. diss, University of Pennsylvania.

Stillman, Norman Arthur. 1973. “The Eleventh Century Merchant House of Ibn ‘Awkal (a Geniza Study).” Journal of the economic and social history of the Orient, 16(1), pp. 15-88.

Stillman, Norman Arthur. 1974. “A Case of Labor Problems in Medieval Egypt.” International journal of Middle East studies, 5(2), pp. 194-201.