How Rome Enabled Impersonal Markets
Explorations in Economic History, 2016, 61, 68-84
28 Pages Posted: 29 Feb 2016 Last revised: 13 Aug 2016
Date Written: March 1, 2016
Impersonal exchange increases trade and specialization opportunities, encouraging economic growth. However it requires the support of sophisticated public institutions. This paper explains how Classical Rome provided such support in the main areas of economic activity by relying on public possession as a titling device, enacting rules to protect innocent acquirers in agency contexts, enabling the extended family to act as a contractual entity, and diluting the enforcement of personal obligations which might collide with impersonal exchange. Focusing on the institutions of impersonal exchange, it reaches a clear positive conclusion on the market-facilitating role of the Roman state because such institutions have unambiguously positive effects on markets. Moreover, being impersonal, these beneficial effects are also widely distributed across society instead of accruing disproportionately to better-connected individuals.
Keywords: property rights, enforcement, transaction costs, Roman law, impersonal exchange, personal exchange, New Institutional Economics, Law and Economics
JEL Classification: D1, D23, G38, K11, K12, K14, K22, K36, L22, N13, O17, P48
Suggested Citation: Suggested Citation