Ethnic Networks, Extralegal Certainty, and Globalisation: Peering into the Diamond Industry

LEGAL CERTAINTY BEYOND THE STATE, Volkmar Gessner, ed., Hart Publishing, Forthcoming

Duke Law School Legal Studies Paper No. 134

20 Pages Posted: 5 Dec 2006 Last revised: 3 Aug 2012

Date Written: February 27, 2008

Abstract

For nearly one millenium, the diamond industry's distribution system remained largely unchanged. Ethnic networks, predominated by Jewish merchants, managed the downstream distribution system. Since state courts are unable to reliably enforce executory contracts for diamond sales, these networks succeeded because their community institutions were able to assert extralegal governance. But recent trends in the globalisation of commerce have introduced pressures that might cause the one thousand year-old system to unravel. Low-wage workers from India have displaced higher wage western merchants, consumer demands for political oversight has brought scrutiny to previously secretive networks, and the profitability of global branding campaigns has enabled DeBeers to implement a vertically integrated business strategy that skips the middleman and sells directly to consumers. Since these pressures represent the paradigmatic forces of globalisation, examining changes in the diamond industry offers insights both into the future of ethnic exchange and into globlisation itself.

Suggested Citation

Richman, Barak D., Ethnic Networks, Extralegal Certainty, and Globalisation: Peering into the Diamond Industry (February 27, 2008). LEGAL CERTAINTY BEYOND THE STATE, Volkmar Gessner, ed., Hart Publishing, Forthcoming; Duke Law School Legal Studies Paper No. 134. Available at SSRN: https://ssrn.com/abstract=949467

Barak D. Richman (Contact Author)

Duke University - School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States
919-613-7244 (Phone)
919-613-7231 (Fax)

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