While the governments of towns supported the development of markets and were intimately involved in developing merchant law (Pirenne, 1925; Rorig, 1967), they often could not provide merchants protection outside their immediate area.* Nor could they enforce judgments against foreign merchants who had left town prior to a case being heard. Thus, merchant law developed prior to the rise of a geographically extensive nation-state. But this raises a key problem in the theory of enforcement, for what made these judgments credible if they were not backed up by the state? Ostracism played an important role here, for merchants that failed to abide by the decisions of the judges would not be merchants for long (Benson, 1989; DeRoover, 1963; Trakman, 1983).

XREF: Relates to informal enforcement mechanisms and reputation-based governance, echoing ideas from game theory and Ostrom-style commons management. Builds on: "Medieval European trade ran on private, self-governed commercial law."

PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE O…, loc. 31