A large number of problems had to be resolved in order to support the expansion of trade. First, as trading communities grew larger, it became harder within each community for merchants to monitor one another's behavior. New institutions were required to mitigate the types of cheating afforded by the new situation. Second, as trade grew among different regions, institutions were needed to prevent reneging by merchants who might cheat in one location, never to be seen again.

XREF: Connects to institutional economics and the classic problem of trust in impersonal exchange, echoing Greif's work on merchant guilds and reputational mechanisms. Builds on: "Commercial law preceded large-scale state enforcement of contracts"

PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE O…, loc. 26