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Contract Enforceability and Economic Institutions in Early Trade: The Maghribi Traders' Coalition
Abstract
This paper presents an economic institution which enabled eleventh-century traders to benefit from employing overseas agents despite the commitment problem inherent in these relations. Agency relations were governed by a coalition--an economic institution in which expectations, implicit contractual relations, and a specific information-transmission mechanism supported the operation of a reputation mechanism. Historical records and a simple game-theoretical model are used to examine this institution. The study highlights the interaction between social and economic institutions, the determinants of business practices, the nature of the merchants' law, and the interrelations between market and nonmarket institutions. Copyright 1993 by American Economic Association.
... In this context, the social trust structure of rural society is evolving from traditional acquaintance-based trust to a more diversified and modernized system [18] The effective implementation of the formal institution often relies on cooperation with the informal institution [3,4]. In rural societies, informal institutions can significantly enhance market functioning through spontaneous social fulfillment mechanisms, such as the behavioral norms based on traditional practices and the maintenance of interpersonal relationships and bonds of trust [5]. As members of rural society, farmers' land transfer decisions are shaped by formal institutions and significantly influenced by informal institutions, such as rural social customs and trust [6,7]. ...
... Specifically, a one-unit increase in trust in village cadres is associated with a 3.54 percentage point increase in the probability of signing written contracts for agricultural land transfer, holding all else constant. An increase in institutional trust can effectively promote the formalization of land transfer contracts, thereby facilitating the standardized Table 6, columns (5) and (6), employ a different dependent variable: the ratio of contracted land area to total transferred area. The results remain essentially unchanged from columns (3) and (4), where institutional trust still significantly increases the ratio of the area of land transferred by farmers to signed written contracts at the 1% statistical level. ...
Facilitating land transfers and contract standardization is crucial for optimizing farmland use and achieving high-quality agricultural development following the round of confirmation, registration, and certification of contracted rural land management rights by the government. Social trust is crucial for cracking the growth dilemma of land transfer, and the impact of farmers’ trust on land transfer may also change after the round of land titling. This study aims to examine the impact of social trust on farm households’ land transfer decisions and the formalization of land transfer contracts within the context of the new round of land titling in China, using models such as IV-Probit, Heckprobit, and conditional mixed process (CMP), with survey data from 2600 Chinese farmers in 2020–2021. The results show that increased social trust significantly enhances both land transfer and contract formalization, and these results remain robust after addressing potential endogeneity. Further analysis reveals that while interpersonal trust promotes land transfer, institutional trust plays a more pivotal role in the formalization of contracts. The results underscore the importance of strengthening grassroots governance to foster institutional trust, enhance institutional reliability, and support the regulated growth of the land transfer market.
... Social trust, a measure that refers to the expression of a cooperative attitude toward people outside the family, as defined by Arrow (1972) , plays an important role in a society. Previous studies have shown that higher levels of social trust facilitate the reduction of transaction costs ( Greif, 1993 ;Guiso, Sapienza, & Zingales, 2009 ;Servaes & Tamayo, 2017 ); promote economic growth ; and lower design and operating costs of social systems ( Bjørnskov & Voigt, 2014 ). Exploring the determinants of social trust is, therefore, both theoretically and practically relevant. ...
This paper investigates the relationship between a region's cultural inclusion and its residents' social trust. Based on the individual-level survey data from China, we find a positive correlation between cultural inclusion and average levels of social trust at the city level. When instrumenting culture inclusion using government spending on the construction of culture and fixed assets, we find a consistent positive correlation between cultural inclusion and social trust. We also find that higher levels of cultural inclusion are positively correlated with the happiness and optimistic social attitudes of residents and are negatively correlated with the probability of misperception and conflicts.
Popular support is important to the emergence and survival of democracy. In this paper, we study how church-state relations in former British Africa shaped long-run support for democracy. We argue that shared national identity was the basis for incentive alignment, facilitating cooperation over educational policy between church and state and engendering long-run support for democracy. Employing geospatial analyses of historical mission data and contemporary social survey data from 19 former British African colonies, we find that areas with missions originating from Britain exhibit better educational outcomes and greater support for democracy than areas that had non-British missions. Furthermore, areas with British Protestant missions show greater support for democracy than British Catholic missions, suggesting that Protestantism supplements the benefits of shared nationhood between mission and state. Our findings add nuance to scholarship on the colonial origins of democracy by highlighting the interdependent legacies of church and state.
Volume I of The Cambridge History of International Law introduces the historiography of international law as a field of scholarship. After a general introduction to the purposes and design of the series, Part 1 of this volume highlights the diversity of the field in terms of methodologies, disciplinary approaches, and perspectives that have informed both older and newer historiographies in the recent three decades of its rapid expansion. Part 2 surveys the history of international legal history writing from different regions of the world, spanning roughly the past two centuries. The book therefore offers the most complete treatment of the historical development and current state of international law history writing, using both a global and an interdisciplinary perspective.
Elites were pivotal for Latin America’s modernization, yet granular evidence of their industrial entrepreneurship is limited. I study Antioquia, an early center of industrialization, from the late nineteenth to early twentieth centuries. Analyzing elite interactions via newfound archival data and exploiting unexpected deaths as exogenous shocks, I find global connectivity—not local—drove industrial entrepreneurship. This suggests diverse resources unavailable in markets but accessible through global connections were crucial in forming industrial ventures. Thus, this paper depicts how social capital shapes elite outcomes.
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