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It is widely believed that current disparities in economic, political, and social outcomes reflect distinct institutions. Institutions are invoked to explain why some countries are rich and others poor, some democratic and others dictatorial. But arguments of this sort gloss over the question of what institutions are, how they come about, and why they persist. This book seeks to overcome these problems, which have exercised economists, sociologists, political scientists, and a host of other researchers who use the social sciences to study history, law, and business administration.
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P1: KAE 0521480442pre CUNY084B/Greif 0 521 48044 2 November 23, 2005 This page intentionally left blank ii 19:6 P1: KAE 0521480442pre CUNY084B/Greif 0 521 48044 2 November 23, 2005 INSTITUTIONS AND THE PATH TO THE MODERN ECONOMY lessons from medieval trade It is widely believed that disparities in economic, political, and social outcomes reflect distinct institutions. There is little agreement, however, among economists, political scientists, and sociologists as to what institutions are, what forces influence their persistence and change, why societies evolve along distinct institutional trajectories, and how we can influence institutional development. This multidisciplinary book develops a concept of institutions that integrates seemingly alternative lines of institutional analysis in the social sciences. It advances a unified framework to study institutional origin, persistence, endogenous change, and the impact of past institutions on subsequent ones. The benefits of this perspective are demonstrated through comparative studies of institutions – particularly those that supported trade – in the late medieval European and Muslim worlds. This comparative analysis of the institutional foundations of markets and polities and their dynamics also provides valuable insights on the functioning of contemporary economies. Indeed, the analysis highlights the possible particularities of the European institutions and why and how they contributed to the rise of the modern economy by supporting impersonal exchange, fostering the rise of effective states, and leading to advances in useful knowledge. Avner Greif is the Bowman Family Endowed Professor in Humanities and Sciences, Professor of Economics, and Senior Fellow at the Institute for International Studies at Stanford University. He is a recipient of fellowships from the American Academy of Arts and Sciences, the MacArthur Foundation, the Econometric Society, the Canadian Institute for Advanced Research, and the Center for Advanced Studies in the Behavioral Sciences, Stanford. He has published articles in such journals as American Economic Review, Journal of Political Economy, Journal of Economic History, American Political Science Review, European Review of Economic History, and Chicago Journal of International Law as well as chapters in many edited books. Greif is also a coauthor of Analytic Narrative (1998), and some of his works have been published in French, Japanese, Persian, and Spanish editions. i 19:6 P1: KAE 0521480442pre CUNY084B/Greif 0 521 48044 2 ii November 23, 2005 19:6 P1: KAE 0521480442pre CUNY084B/Greif 0 521 48044 2 November 23, 2005 political economy of institutions and decisions Series Editors Randall Calvert, Washington University, St. Louis ´ Thrainn Eggertsson, University of Iceland and New York University Founding Editors James E. Alt, Harvard University Douglass C. North, Washington University, St. Louis Other books in the series Alberto Alesina and Howard Rosenthal, Partisan Politics, Divided Government, and the Economy ´ Lee J. Alston, Thrainn Eggert