Interest Bans, Impersonal Exchange, and Endogenous Institutional Change in Islam and Christianity
نویسنده
چکیده
Numerous economic historians have suggested that institutions which supported contract enforcement were necessary for impersonal exchange to emerge in medieval Europe. Yet this literature cannot account for the bill of exchange, an important financial instrument that was legally enforced in both the medieval Islamic and Christian worlds but remained relegated to personal networks in only the former. This paper suggests that differential enforcement of interest restrictions can account for this phenomenon. Religious bans existed in both regions, but secular restrictions were relaxed only in Europe, encouraging international credit extension (via bills of exchange) and endogenous institutional changes which did not occur in the Islamic world. JEL Classifications: B15; D02; E49; F31; G21; K29; K42; N20; N40; N70; O43; P45; Z12
منابع مشابه
Bills of exchange, interest bans, and impersonal exchange in Islam and Christianity
A vast economic history literature suggests that medieval institutions supporting contract enforcement were necessary for impersonal exchange to emerge. Yet this literature cannot account for the bill of exchange, an important financial instrument that had positive legal standing in both the medieval Islamic and Christian worlds but remained relegated to personal networks only in the former. Th...
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