Social Capital and Collusion: The Case of Merchant Guilds

40 Pages Posted: 30 Sep 2003

See all articles by Sheilagh Ogilvie

Sheilagh Ogilvie

All Souls College, Oxford; CESifo (Center for Economic Studies and Ifo Institute)

Roberta Dessi

University of Toulouse 1 - Toulouse School of Economics (TSE)

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). Available at SSRN: https://ssrn.com/abstract=449263 or http://dx.doi.org/10.2139/ssrn.449263

Sheilagh Ogilvie (Contact Author)

All Souls College, Oxford ( email )

All Souls College
Oxford, OX1 4AL
United Kingdom
44-7799-870245 (Phone)

HOME PAGE: http://https://www.asc.ox.ac.uk/person/3498

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Roberta Dessi

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

1 Esplanade de l'Université
Toulouse Cedex 06
Toulouse, 31080
France

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