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Memory, Transaction Records, and The Wealth of NationsSudipta BasuTemple University - Fox School of Business and Management Marcus KirkUniversity of Florida - Fisher School of Accounting Gregory B. WaymireEmory University - Department of Accounting February 21, 2009 AAA 2008 Financial Accounting and Reporting Section (FARS) Paper Accounting, Organizations and Society, Vol. 34, No. 8, 2009 Abstract: Adam Smith hypothesized that impersonal exchange was necessary for a society to develop specialized division of labor and create wealth. Douglass North and Vernon Smith argue that successful developed economies are the result of institutions. We hypothesize and provide evidence from ethnographic data that the basic accounting technology of recording transactions is associated with more extensive impersonal exchange and increased specialization in the division of labor. Our intuition is that extensive impersonal exchange requires reliable memory of trading partners’ past behavior to sustain trust and encourage reciprocity when a group expands beyond the size of traditional hunter-gatherer groups. Our findings are consistent with the hypothesis that transaction records are necessary for the emergence of complex economies as suggested by the archaeological evidence of recordkeeping in Mesopotamian societies 10,000 years ago.
Number of Pages in PDF File: 49 Keywords: Recordkeeping, accounting history, economic development and institutions JEL Classification: M40, M41, M46, O10, N20, G20, D20 working papers seriesDate posted: August 22, 2007 ; Last revised: April 3, 2010Suggested CitationContact Information
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