IDEAS home Printed from https://ideas.repec.org/a/ucp/jlawec/v52y2009i4p761-786.html
   My bibliography  Save this article

Social Insurance, Commitment, and the Origin of Law: Interest Bans in Early Christianity

Author

Listed:
  • Jared Rubin

Abstract

Despite the historical importance of ideology-based, economically inhibitive laws, we know little about the economic factors underlying their origin. This paper accounts for the historical emergence of one such law: the Christian ban on taking interest-a doctrine that shaped the evolution of numerous financial contracts and related organizational forms. A game-theoretic analysis and historical evidence suggest that the Church's commitment to providing social insurance for its poorest constituents encouraged risky borrowing, which the Church attempted to limit by banning interest. The analysis highlights the applicability of the rational choice framework to seemingly irrational actions and laws, the role of nonmonetary sanctions in circumventing commitment problems, and the importance of economic forces vis-Ã -vis ideology. (c) 2009 by The University of Chicago. All rights reserved.

Suggested Citation

  • Jared Rubin, 2009. "Social Insurance, Commitment, and the Origin of Law: Interest Bans in Early Christianity," Journal of Law and Economics, University of Chicago Press, vol. 52(4), pages 761-786, November.
    • Handle: RePEc:ucp:jlawec:v:52:y:2009:i:4:p:761-786
    DOI: 10.1086/595796
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/595796
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1086/595796?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Posner, Eric A, 1995. "Contract Law in the Welfare State: A Defense of the Unconscionablility Doctrine, Usury Laws, and Related Limitations on the Freedom to Contract," The Journal of Legal Studies, University of Chicago Press, vol. 24(2), pages 283-319, June.
    2. Ran Abramitzky, 2008. "The Limits of Equality: Insights from the Israeli Kibbutz," Discussion Papers 07-048, Stanford Institute for Economic Policy Research.
    3. Edward L. Glaeser & Andrei Shleifer, 2002. "Legal Origins," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1193-1229.
    4. Ekelund, Robert B, Jr & Hebert, Robert F & Tollison, Robert D, 1989. "An Economic Model of the Medieval Church: Usury as a Form of Rent Seeking," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 5(2), pages 307-331, Fall.
    5. Richardson, Gary & McBride, Michael, 2009. "Religion, longevity, and cooperation: The case of the craft guild," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 172-186, August.
    6. Posner, Richard A, 1980. "A Theory of Primitive Society, with Special Reference to Law," Journal of Law and Economics, University of Chicago Press, vol. 23(1), pages 1-53, April.
    7. Neil Bruce & Michael Waldman, 1990. "The Rotten-Kid Theorem Meets the Samaritan's Dilemma," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(1), pages 155-165.
    8. Eli Berman, 2000. "Sect, Subsidy, and Sacrifice: An Economist's View of Ultra-Orthodox Jews," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 905-953.
    9. repec:dau:papers:123456789/4568 is not listed on IDEAS
    10. Marcel Fafchamps & Flore Gubert, 2007. "Contingent Loan Repayment in the Philippines," Economic Development and Cultural Change, University of Chicago Press, vol. 55(4), pages 633-667, July.
    11. Marcle Fafchamps, 1999. "Risk sharing and quasi-credit," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(3), pages 257-278.
    12. Fafchamps, Marcel & Lund, Susan, 2003. "Risk-sharing networks in rural Philippines," Journal of Development Economics, Elsevier, vol. 71(2), pages 261-287, August.
    13. Greif,Avner, 2006. "Institutions and the Path to the Modern Economy," Cambridge Books, Cambridge University Press, number 9780521671347, September.
    14. Joseph Persky, 2007. "Retrospectives: From Usury to Interest," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 227-236, Winter.
    15. Ran Abramitzky, 2008. "The Limits of Equality: Insights from the Israeli Kibbutz," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(3), pages 1111-1159.
    16. Gary Richardson, 2005. "Craft Guilds and Christianity in Late-Medieval England," Rationality and Society, , vol. 17(2), pages 139-189, May.
    17. Lindbeck, Assar & Weibull, Jorgen W, 1988. "Altruism and Time Consistency: The Economics of Fait Accompli," Journal of Political Economy, University of Chicago Press, vol. 96(6), pages 1165-1182, December.
    18. Reed, Clyde G. & Bekar, Cliff T., 2003. "Religious prohibitions against usury," Explorations in Economic History, Elsevier, vol. 40(4), pages 347-368, October.
    19. Iannaccone, Laurence R, 1992. "Sacrifice and Stigma: Reducing Free-Riding in Cults, Communes, and Other Collectives," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 271-291, April.
    20. Robert H. Bates & Avner Greif & Margaret Levi & Jean-Laurent, 1998. "Analytic Narratives," Economics Books, Princeton University Press, edition 1, volume 1, number 6355.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sascha O. Becker & Jared Rubin & Ludger Woessmann, 2024. "Religion and Growth," Journal of Economic Literature, American Economic Association, vol. 62(3), pages 1094-1142, September.
    2. Becker, Sascha O. & Rubin, Jared & Woessmann, Ludger, 2020. "Religion in Economic History : A Survey," The Warwick Economics Research Paper Series (TWERPS) 1273, University of Warwick, Department of Economics.
    3. Michalopoulos, Stelios & Naghavi, Alireza & Prarolo, Giovanni, 2016. "Islam, inequality and pre-industrial comparative development," Journal of Development Economics, Elsevier, vol. 120(C), pages 86-98.
    4. Koyama, Mark, 2010. "Evading the 'Taint of Usury': The usury prohibition as a barrier to entry," Explorations in Economic History, Elsevier, vol. 47(4), pages 420-442, October.
    5. Mark Koyama, 2019. "Peter T. Leeson, WTF?!: An economic tour of the weird," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(1), pages 81-84, March.
    6. Rubin, Jared, 2010. "Bills of exchange, interest bans, and impersonal exchange in Islam and Christianity," Explorations in Economic History, Elsevier, vol. 47(2), pages 213-227, April.
    7. Zegarra, Luis Felipe, 2017. "Usury laws and private credit in Lima, Peru. Evidence from notarized records," Explorations in Economic History, Elsevier, vol. 65(C), pages 68-93.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sriya Iyer, 2016. "The New Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 54(2), pages 395-441, June.
    2. Philipp Ager & Antonio Ciccone, 2018. "Agricultural Risk and the Spread of Religious Communities," Journal of the European Economic Association, European Economic Association, vol. 16(4), pages 1021-1068.
    3. Jason A. Aimone & Laurence R. Iannaccone & Michael D. Makowsky & Jared Rubin, 2013. "Endogenous Group Formation via Unproductive Costs," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1215-1236.
    4. Carvalho, Jean-Paul & Koyama, Mark, 2016. "Jewish emancipation and schism: Economic development and religious change," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 562-584.
    5. Kimbrough, Erik O. & Rubin, Jared & Sheremeta, Roman M. & Shields, Timothy W., 2015. "Commitment problems in conflict resolution," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 33-45.
    6. Richardson, Gary & McBride, Michael, 2009. "Religion, longevity, and cooperation: The case of the craft guild," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 172-186, August.
    7. Jean-Paul Carvalho & Mark Koyama & Michael Sacks, 2017. "Education, identity, and community: lessons from Jewish emancipation," Public Choice, Springer, vol. 171(1), pages 119-143, April.
    8. Philipp Ager & Antonio Ciccone, 2013. "Rainfall Risk and Religious Membership in the Late Nineteenth-Century US," Working Papers 2013-17, FEDEA.
    9. Seror, Avner, 2018. "A theory on the evolution of religious norms and economic prohibition," Journal of Development Economics, Elsevier, vol. 134(C), pages 416-427.
    10. Fletcher, Erin K. & Iyigun, Murat, 2009. "Cultures, Clashes and Peace," IZA Discussion Papers 4116, Institute of Labor Economics (IZA).
    11. Mark Koyama & Jean-Paul Carvalho, "undated". "Development and Religious Polarization: The Emergence of Reform and Ultra-Orthodox Judaism," Discussion Papers 11/11, Department of Economics, University of York.
    12. Cavalcanti, Tiago & Iyer, Sriya & Rauh, Christopher & Roerig, Christian & Vaziri, Maryam, 2022. "A City of God: Afterlife Beliefs and Job Support in Brazil," CEPR Discussion Papers 17719, C.E.P.R. Discussion Papers.
    13. Choy, James P., 2020. "Religious rules as a means of strengthening family ties: Theory and evidence from the Amish," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 729-748.
    14. Sascha O. Becker & Jared Rubin & Ludger Woessmann, 2024. "Religion and Growth," Journal of Economic Literature, American Economic Association, vol. 62(3), pages 1094-1142, September.
    15. David Skarbek & Peng Wang, 2015. "Criminal rituals," Global Crime, Taylor & Francis Journals, vol. 16(4), pages 288-305, October.
    16. Anthony Gill, 2021. "The comparative endurance and efficiency of religion: a public choice perspective," Public Choice, Springer, vol. 189(3), pages 313-334, December.
    17. Ingela Alger & Jörgen W. Weibull, 2010. "Kinship, Incentives, and Evolution," American Economic Review, American Economic Association, vol. 100(4), pages 1725-1758, September.
    18. Greif, Avner & Tadelis, Steven, 2010. "A theory of moral persistence: Crypto-morality and political legitimacy," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 229-244, September.
    19. Kaivan Munshi & Mark Rosenzweig, 2016. "Networks and Misallocation: Insurance, Migration, and the Rural-Urban Wage Gap," American Economic Review, American Economic Association, vol. 106(1), pages 46-98, January.
    20. Fafchamps, Marcel & Gubert, Flore, 2007. "The formation of risk sharing networks," Journal of Development Economics, Elsevier, vol. 83(2), pages 326-350, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:v:52:y:2009:i:4:p:761-786. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.