Department of Economics and Business - Universitat Pompeu Fabra

Title:: How Rome enabled impersonal markets
Author:: Benito Arruñada
Date:: March 2016
Abstract:: Impersonal exchange increases trade and specialization opportunities, encouraging economic growth. However it requires the support of sophisticated public institutions. This paper explains how Classical Rome provided such support in the main areas of economic activity by relying on public possession as a titling device, enacting rules to protect innocent acquirers in agency contexts, enabling the extended family to act as a contractual entity, and diluting the enforcement of personal obligations which might collide with impersonal exchange. Focusing on the institutions of impersonal exchange, it reaches a clear positive conclusion on the market-facilitating role of the Roman state because such institutions have unambiguously positive effects on markets. Moreover, being impersonal, these beneficial effects are also widely distributed across society instead of accruing disproportionately to better-connected individuals.
Keywords:: property rights, enforcement, transaction costs, Roman law, impersonal exchange, personal exchange, New Institutional Economics, Law and Economics.
JEL codes:: D1,D23,G38,K11,K12,K14,K22 K36,L22,N13,O17,P48
Area of Research:: Business Economics and Industrial Organization
Published in:: Explorations in Economic History, 61, 68-84, 2016.

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