Was Avner Greif right?

Jeremy Edwards and Sheilagh Ogilvie argue that

“Economists draw important lessons for modern development from the medieval Maghribi traders who, according to Greif, enforced contracts multilaterally through a closed, private-order ‘coalition’. We show that this view is untenable. The Maghribis used formal legal mechanisms and entered business associations with non-Maghribis. Not a single empirical example adduced by Greif shows that any ‘coalition’ actually existed. The Maghribis cannot be used to argue that the social capital of exclusive networks will facilitate exchange in developing economies. Nor do they provide any support for the cultural theories of economic development and institutional change for which they have been mobilised.”

Here is the paper:

Ogilvie, Edwards, Jeremy and Ogilvie, Sheilagh, “Contract Enforcement, Institutions and Social Capital: The Maghribi Traders Reappraised” (March 2008). CESifo Working Paper Series No. 2254 Available at SSRN: http://ssrn.com/abstract=1107801

You could also be interested in my review of Greif:

Aydınonat, N. E., (2006) “Institutions: Theory, History and Context-Specific Analysis” History of Economic Ideas, 3: 143-156. [Download]

—–
Thanks to Tyler Cowen (at Marginal Revolution) for the pointer.

—–

Update:

Organizations and Markets Blog alerts us that Grief has responded to Edwards and Ogilvie’s remarks. Greif’s response is here (at SSRN).

Also see David Harbord’s interesting paper entitled “Enforcing cooperation among medieval merchants: The Maghribi traders revisited” (Download here) and Peter Klein’s post entitled “Did Avner Greif Misread the Geniza Documents?”