Social Capital and Collusion: The Case of Merchant Guilds

40 Pages Posted: 30 Sep 2003

See all articles by Sheilagh Ogilvie

Sheilagh Ogilvie

University of Cambridge - Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Roberta Dessi

University of Toulouse 1 - Groupe de Recherche en Economie Mathématique et Quantitative (GREMAQ)

Date Written: September 2003

Abstract

Merchant guilds have been portrayed as "social networks" that generated beneficial "social capital" by sustaining shared norms, effectively transmitting information, and successfully undertaking collective action. This social capital, it is claimed, benefited society as a whole by enabling rulers to commit to providing a secure trading environment for alien merchants. But was this really the case? We develop a new model of the emergence, rise, and eventual decline of European merchant guilds, which explores the collusive relationship between rulers and guilds, and calls into question the prevailing positive view of merchant guilds. We then confront the model's predictions with the available historical data. The empirical evidence strongly supports our model, and refutes existing theories. Our findings show that merchant guilds used their social capital for socially harmful as well as beneficial ends.

Keywords: merchant guild, collusion, social capital, social networks, monopoly, taxation, rents

JEL Classification: N40, F1, L4

Suggested Citation

Ogilvie, Sheilagh and Dessi, Roberta, Social Capital and Collusion: The Case of Merchant Guilds (September 2003). CESifo Working Paper Series No. 1037. Available at SSRN: https://ssrn.com/abstract=449263

Sheilagh Ogilvie (Contact Author)

University of Cambridge - Faculty of Economics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom
44-1223-335200 (Phone)
44-1223-335475 (Fax)

HOME PAGE: http://www.econ.cam.ac.uk/people/faculty/sco2

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Roberta Dessi

University of Toulouse 1 - Groupe de Recherche en Economie Mathématique et Quantitative (GREMAQ) ( email )

Manufacture des Tabacs
21 Allees de Brienne
Toulouse, 31000
France

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