Jamal Awil

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Social introductions can substitute for formal licensing in closed markets. [causal]

As this rather old case (Hess 1973) suggests, territorial licensing can affect markets of all sorts: "In 1913 a doctor A from Palermo settled in Caltanisetta and there set up a practice. However, several months passed without a single patient X calling on his services. He thereupon went to Palermo and asked a friend B, a senior civil servant, to help him. The civil servant listened to his story and then got on to butcher C, whom he knew. The [Butcher] wrote on a piece of paper: il dottor... è mio amico [the doctor is my friend], signed the sentence and sent the doctor to another butcher D in Caltanisetta to hand over his message. This the doctor did and from that moment his difficulties were over" (p. 138).

XREF: Connects to work on informal institutions, social capital (Putnam), and trust-based market coordination versus formal licensing regimes.

Diego Gambetta, The Sicilian Mafia The Busi…, loc. 998