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‘Whatever is, is right’? Economic institutions in pre‐industrial Europe

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  • SHEILAGH OGILVIE

Abstract

Institutions—the structures of rules and norms governing economic transactions—are widely assigned a central role in economic development. Yet economic history is still dominated by the belief that institutions arise and survive because they are economically efficient. This article shows that alternative explanations of institutions, particularly those incorporating distributional effects, are consistent with economic theory and supported by empirical findings. Distributional conflicts provide a better explanation than efficiency for the core economic institutions of pre‐industrial Europe: serfdom, the community, the craft guild, and the merchant guild. The article concludes by proposing four desiderata for any economic theory of institutions.

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  • Sheilagh Ogilvie, 2007. "‘Whatever is, is right’? Economic institutions in pre‐industrial Europe," Economic History Review, Economic History Society, vol. 60(4), pages 649-684, November.
    • Handle: RePEc:bla:ehsrev:v:60:y:2007:i:4:p:649-684
    DOI: 10.1111/j.1468-0289.2007.00408.x
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    1. Greif,Avner, 2006. "Institutions and the Path to the Modern Economy," Cambridge Books, Cambridge University Press, number 9780521480444, October.
    2. Ogilvie, Sheilagh, 2003. "A Bitter Living: Women, Markets, and Social Capital in Early Modern Germany," OUP Catalogue, Oxford University Press, number 9780198205548.
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    Cited by:

    1. Sheilagh Ogilvie, 2008. "Rehabilitating the guilds: a reply," Economic History Review, Economic History Society, vol. 61(1), pages 175-182, February.
    2. van Bavel, Bas, 2016. "The Invisible Hand?: How Market Economies have Emerged and Declined Since AD 500," OUP Catalogue, Oxford University Press, number 9780199608133.
    3. Van Zanden, Jan Luiten, 2009. "The skill premium and the ‘Great Divergence’," European Review of Economic History, Cambridge University Press, vol. 13(1), pages 121-153, April.
    4. Piet Cruyningen, 2015. "Dealing with drainage: state regulation of drainage projects in the Dutch Republic, France, and England during the sixteenth and seventeenth centuries," Economic History Review, Economic History Society, vol. 68(2), pages 420-440, May.
    5. Crafts, Nicholas & O’Rourke, Kevin Hjortshøj, 2014. "Twentieth Century Growth*This research has received funding from the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013) / ERC grant agreement no. 249546.," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 263-346, Elsevier.
    6. Bas van Bavel & Daniel Curtis, 2015. "Better understanding disasters by better using history: Systematically using the historical record as one way to advance research into disasters," Working Papers 0068, Utrecht University, Centre for Global Economic History.
    7. Kopsidis, Michael & Bromley, Daniel W., 2014. "The French Revolution and German industrialization: The new institutional economics rewrites history," IAMO Discussion Papers 178686, Institute of Agricultural Development in Transition Economies (IAMO).
    8. repec:zbw:iamodp:178686 is not listed on IDEAS
    9. Matt Raven, 2022. "Wool smuggling from England's eastern seaboard, c. 1337–45: An illicit economy in the late middle ages," Economic History Review, Economic History Society, vol. 75(4), pages 1182-1213, November.
    10. Peter T. Leeson & Colin Harris, 2018. "Testing rational choice theories of institutional change," Rationality and Society, , vol. 30(4), pages 420-431, November.
    11. Peter Sandholt Jensen & Cristina Victoria Radu & Battista Severgnini & Paul Sharp, 2018. "The introduction of serfdom and labour markets," Working Papers 0140, European Historical Economics Society (EHES).
    12. Seven Ağir, 2018. "The rise and demise of gedik markets in Istanbul, 1750–1860," Economic History Review, Economic History Society, vol. 71(1), pages 133-156, February.
    13. Erik Lindberg, 2009. "Club goods and inefficient institutions: why Danzig and Lübeck failed in the early modern period," Economic History Review, Economic History Society, vol. 62(3), pages 604-628, August.
    14. Sarah Guilland Carmichael & Alexandra de Pleijt & Jan Luiten van Zanden & Tine De Moor, 2015. "Reply to Tracy Dennison and Sheilagh Ogilvie: The European Marriage pattern and the Little Divergence," Working Papers 0070, Utrecht University, Centre for Global Economic History.
    15. Josemiguel Lana Berasain & Miguel Laborda Pemán, 2013. "El anidamiento institucional y su dinámica histórica en comunidades rurales complejas. Dos estudios de caso (Navarra, siglos XIV-XX)," Documentos de Trabajo de la Sociedad de Estudios de Historia Agraria 1307, Sociedad de Estudios de Historia Agraria.
    16. Jeroen Puttevils, 2015. "‘Eating the bread out of their mouth’: Antwerp's export trade and generalized institutions, 1544–5," Economic History Review, Economic History Society, vol. 68(4), pages 1339-1364, November.
    17. Bas van Bavel & Jessica Dijkman & Erika Kuijpers & Jaco Zuijderduijn, 2011. "The Organisation of Markets as a Key Factor in the Rise of Holland, Fourteenth-Sixteenth Centuries. A Test Case for an Institutional Approach," Working Papers 0006, Utrecht University, Centre for Global Economic History.
    18. Sheilagh Ogilvie, 2012. "Choices and Constraints in the Pre-Industrial Countryside," Working Papers 1, Department of Economic and Social History at the University of Cambridge, revised 01 Jan 2012.
    19. Giovanni Dosi & Luigi Marengo & Alessandro Nuvolari, 2019. "Institutions are neither autistic maximizers nor flocks of birds: self-organization, power and learning in human organizations," Chapters, in: Francesca Gagliardi & David Gindis (ed.), Institutions and Evolution of Capitalism, chapter 13, pages 194-213, Edward Elgar Publishing.
    20. Matteo Di Tullio, 2018. "Cooperating in time of crisis: war, commons, and inequality in Renaissance Lombardy," Economic History Review, Economic History Society, vol. 71(1), pages 82-105, February.
    21. Van Bavel, Bas, 2015. "History as a laboratory to better understand the formation of institutions," Journal of Institutional Economics, Cambridge University Press, vol. 11(1), pages 69-91, March.
    22. Minns, Chris & Wallis, Patrick, 2009. "Rules and reality: quantifying the practice of apprenticeship in early modern Europe," Economic History Working Papers 27865, London School of Economics and Political Science, Department of Economic History.
    23. Libman, Alexander, 2008. "Informal regionalism in Central Asia: subnational and international levels," MPRA Paper 26417, University Library of Munich, Germany.
    24. Elias L. Khalil, 2017. "Exploitation and Efficiency," The Review of Black Political Economy, Springer;National Economic Association, vol. 44(3), pages 363-377, December.
    25. Thomas Leng, 2016. "Interlopers and disorderly brethren at the Stade Mart: commercial regulations and practices amongst the Merchant Adventurers of England in the late Elizabethan period," Economic History Review, Economic History Society, vol. 69(3), pages 823-843, August.

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