Paper #1471

Title:

The institutions of Roman markets

Author:

Benito Arruñada

Date:

March 2015 (Revised: November 2019)

Abstract:

The chapter analyzes the basis of the market economy in classical Rome, from the perspective of personal vs impersonal exchange and focusing on the role of the state in providing market-enabling institutions. It starts by reviewing the central conflict in all exchanges between those holding and those acquiring property rights, and how solving it requires reducing information asymmetry without endangering the security of property. Relying on a model of the social choice of institutions, the chapter identifies the demand and supply factors driving the institutional choices made by the Romans, and examines the economic circumstances that influenced these factors in the classical period of Roman law. Comparing the predictions of the model with the main solutions used by Roman law in the areas of property, business exchange, and the enforcement of personal obligations allows the chapter to propose alternative interpretations for some salient institutions that have been subject to controversy in the literature, and to conclude with an overall positive assessment of the market-enabling role of the Roman state.

Keywords:

economics of ancient law, economics of ancient societies, economic analysis of Roman law, law and economics, Roman history, property rights, transaction costs, registries, impersonal exchange,

JEL codes:

D1 D23 G38 K11 K12 K14 K22 K36 L22 N13 O17 P48

Area of Research:

Business Economics and Industrial Organization

Published in:

Giuseppe Dari-Mattiacci, ed., Roman Law and Economics, vol. 2, Ch. 17. Oxford Studies in Roman Society and Law (Tom McGinn and Paul Du Plessis, eds.). Oxford: Oxford University Press, 2020.

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