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On the Political Foundations of the Late Medieval Commercial Revolution: Genoa During the Twelfth and Thirteenth Centuries Author(s): Avner Greif Source: The Journal of Economic History, Vol. 54, No. 2, Papers Presented at the Fifty-Third Annual Meeting of the Economic History Association (Jun., 1994), pp. 271-287 Published by: Cambridge University Press on behalf of the Economic History Association Stable URL: http://www.jstor.org/stable/2123913 . Accessed: 22/05/2013 23:19
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CA. ' For example.179. Alessandra Casella. political institutions. This article conducts such an analysis with respect to the city of Genoa during the twelfth and thirteenth centuries. Stanford. Ann Carlos. and so on. Rosenberg and Birdzell (How the West. legal rights. 35) have asserted that "[W]estern wealth began with the growth of European trade and commerce which started in the twelfth century in Italy. and economic growth in Genoa.16.2This article sheds light on the political foundations of the Commercial Revolution by examining the relations between economic incentives. Karen Clay. p. The author is Assistant Professor of Economics at Stanford University. Steven A. and participants of seminars held at the American Economic Association 1992 Annual Meeting. Bentley W. 54. 271 This content downloaded from 130. Gavin Wright. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions . MacLeod. the politicalfoundationsof this growth. Sachi Shimomura and Marco Da Rin provided most beneficial research assistance. Viewing political institutions as self-enforcing agreements rather than as exogenous rules. and the University of Maryland." 2 See. Lopez.These overseas possessions were both tangible and intangibleand included ports. have been ignored. by and large. CA 94305. The support of National Science Foundation Grants 9009598-01 and 9223974 and research support provided by the Institutional Reform in the Informal Sector at the University of Maryland at College Park is gratefully acknowledged. ISSN 0022-05070.201 on Wed. I present and analyze the nature and evolution of Genoa's political systems and the relations between these systems and economic growth. The extent of an Italian city-state's sea-bound trade was determined by its "possessions" around the Mediterranean. Epstein. 2 (June 1994). Vol.On the Political Foundations of the Late Medieval Commercial Revolution: Genoa During the Twelfth and Thirteenth Centuries AVNER GREIF Although the late medieval Commercial Revolution is considered to be a watershed in the economic history of Europe. Possessions facilitatedthe expansion of trade by substantially reducing the risk and cost of The Journal of Economic History. No. houses.' Although the economic aspects of the Commercial Revolution have been examined by Robert Sabatino Lopez and others. Charles Miles. T'heeconomic growth of northernItaly's city-states duringthe late medieval Commercial Revolution had a lasting impact on the economic development of Europe. ? The Economic History Association. The usual caveats apply. Cornell University. whose kind hospitality greatly facilitated this study. Stanford. customs agreements. for example. Ben Polak. the analysis of the interrelationship between political and economic systems in bringing about this period of economic growth has been neglected. All rights reserved. This article was written while I was a Fellow at the Center for Advanced Studies in the Behavioral Sciences. I have benefitted from the comments of Yoram Barzel. the Economic History Association 1993 Annual Meeting. a co-editor of this JOURNAL. Commercial Revolution. one of the most importantItalian city-states.
7 Olson. North. In the early stages of the CommercialRevolution. Paramountamong these were a collective-action problem. s Bairoch et al.201 on Wed. The Population. for example." For the relations between institutions and growth. vol. I. for the merchants-an ideal platform for the Commercial 6 As recent theoreticaland historical studies have shown. Commercial Revolution.3 For example. and North and Weingast.179.16. pp. Theory. and Giovanni Scriba. 49-50. "Constitutions and Commitment. p.4 The acquisitionof possessions by a city-state in turn depended on its potential naval and militaryforces. their economic implications. each with a population of about 100. 4 This content downloaded from 130. Rise and Decline. Throughout history "states" have provided the institutional infrastructure needed to deal with such problems. for example. distributionalconflicts and collective-action and free rider problems are likely to prevent the establishment of economically efficient political systems.. Economic historians have implicitly assumed that the city-states' political systems were a response to the gains to be attained from establishing them. the richest maritimecities of Italy-Venice and Genoa-were among the largest cities in Latin Europe. Institutions. 84. by the merchants. In this article I analyze the relations between and coevolution of Genoa's political and economic systems duringthe CommercialRevolution. social and economic incentives within the "naturalgroup" could have mitigated the problems of collective action and cooperation.5 Understanding economic growth in the maritime Italian city-states during the CommercialRevolution requires examining the emergence of political systems that facilitatedthe acquisitionof possessions by mitigating collective-action problems and enabling people unrelatedby blood or marriageto cooperate.the political ramifications 3 For discussion see. But by 1300.'" however. Hence in order to expand its trade. Lopez asserted. that "the Italian communes were essentially governments of the merchants. however. and a problemof cooperation.272 Greif commerce. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions . Structure and Change.Clearly. I examine the characteristicsof political systems implemented by the Genoese. motivatingindividuals to cooperate-or credibly commit to cooperate-in the forces' operations.7 The emergence of an efficient political system cannot be taken for grantedjust because potential gains from cooperation exist. inducing individualsto supply private resources to form the necessary forces. see North. in cases where a particularlineage dominateda city or when a city was small. a city-state had to solve problems associated with mountingnaval and military operations. Revolution. there was no state to provide the residents of the north Italiancoast with such an infrastructure.000. p. Genoa's trade in North Africa more than doubled after the city acquiredpossessions in that area in 1161. 71. Annali (1161). Hicks. 6 Lopez.
OVERSEAS POSSESSIONS AND CONSULS' INCENTIVE SCHEME Although the Holy Roman Empire. Duby (Early Growth) has noted that in general during this period "urban administrators had a hidden tendency to mistake the funds entrusted to them for the contents of their own coffers and twist to their own advantage the economic regulations they were empowered to lay down. a consul was officiallycompensatedby a fixed pecuniarypayment and a share in the commune's revenue duringhis year in office. namely. I. no. The election process is unknown. and resources to devising and implementinga policy that would increase Genoa's trade and revenues mainly after his term expired.16. and reflects concerns regarding the consuls' ability to expropriate the rent from Genoa's possessions and unlawfully gain from their post.'0 In itself. and conducting negotiations abroad. For a similar observation regarding Genoa. this rewardscheme would have been an inadequatesolution to the collective-action problem that the Genoese faced. They were the real beneficiaries of the political conquests and fruits of urban vitality" (p. participating expeditions. Breviario. and the reasons for a shift from one system to another.). centered in Germany. organizingdefense.Political Systems and Economic Growth in Genoa 273 of economic change. vol. it was not strong enough to gain de facto control over it during the eleventh century. pp. 48. for example. 178. and Vitale. Storia Delle Colonie. I. During that time. a consul's compensation depended mainly on the possessions acquired by previous consuls rather than those he acquired himself. pp.1' This is not to say. Annali (1154). p. claims that such a reward scheme existed. that Genoa's consuls were not pursuing a policy that enrichedtheircity. such as taking bribes. Rent expropriation is sufficient for the following analysis to hold. vol.") This content downloaded from 130. in Codice Diplomatico. a consul had to devote much time. The consuls' short-termrewardscheme motivated them to devote resources to implementingeconomic policy 8 De Negri. motivating their copsuls to devote resources to the acquisition of possessions. p.9At most. which is a consul's oath. 247). however. does not explicitly reflect the existence of such a reward. 9 For example. vol. 129-30. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions . that is.201 on Wed. Genoa's political. I. allowance or right of the consuls. administrative. (Storia vol. vol. II. effort.179. Storia. (1173). 44ff. 227. In 1122 the yearly term was institutionalized. p. I. among other things. the residents of Genoa organized themselves as a commune by taking an oath that bound them to mutualprotection and assistance. for example. as in military they entailed.8 Consularservices were costly to provide. 10 Pertile. and (1192). After 1098. because such reward was also likely to have been increasing in Genoa's revenues. (Unofficial reward is reflected. 128. 1 Note that this conclusion holds even if a consul had some "unofficial" reward during his term. A consul's wife had to swear that she "will not accept service of anything that pertains to the consulate beyond the sum of three solidi. II. II. see Lopez. To acquirepossessions. no. It mentions some unspecified feudo. for devising and implementing Genoa's policy on the acquisitionof possessions. vol. Codice Diplomatico. claimed sovereignty over Genoa. 128. p.and militaryleaders consisted of four to eight consuls who were elected yearly and were responsible. Therefore. Hence he was ill motivated to acquire possessions. 15. vol. (1164).
more than any other family. Annali (1136). There is the possibility that the consuls' short-termremuneration was a part of a broaderreward scheme sufficientto induce them to acquire possessions.274 Greif yielding revenues duringtheir term. he would ensure his reelection. immense spoil. I."'"The existing incentive scheme did not motivate consuls to acquire possessions. reportsthat by 1154"the city was asleep and was sufferingfrom apathy and was like a ship wandering across the sea without a navigator. Economic growth was constrained by Genoa's political system. The holding of consulate posts among families was much more concentrated: the average numberof times a family held a post was 3. the author of Genoa's annals. 75. Annali (1137). vol.65). vol.'2 Yet. Caffaro. ECONOMIC GROWTH IN THE SHADOW OF AUTOCRACY The political and economic history of Genoa in the second half of the twelfth century differsremarkably from that of the first. For example. pp. as I will discuss further.17 12 Annali (1129). held consular posts 19 times (10. pp. as has been noted by the historian GeraldW. and Codice Diplomatico. I. who together dominatedthe consulate. But the ample existing historical records do not provide evidence of such a wider rewardscheme. vol. I. Is Annali (1154). Annali (1163). vol.at times. vol.201 on Wed. and Annali (1143-1144).9 (with a standard deviation of 4. Reasons for examining these years are given in the following discussion. see for example. "[T]he Genoese were unusuallyslow to develop" trade based on possessions. See Oberto Scriba (1190). I. vol. I. vol. vol. See also the relevant years in the Annali. I. (Around that time a ship (cocil) was worth 160 lire. and the scope of this article precludes This content downloaded from 130. In particular. these families changed over time. the della Volta. p. a consul might be motivated to acquire possessions if. I. for example. Genoa's Response. p. 48.179. and the average numberof times a family held a post was 2. 36. by doing so. Duringthe first half of the twelfth century.98 (with a standard deviation of 2. no.000 lire. trade expansion based on overseas possessions and not piracywas the key to sustainedlong-termeconomic growth for the Italian maritimecities. 663. Day.) For other raids.3). p.6 percent of the total). and Olivieri. 100-101.membersof 43 noble families sharedthe consulate. I do not elaborate on the families that were politically affiliated with the della Voltas because.the consuls initiated militaryraids againstthe ships and ports of other politicalunits. 41-42. 32-33. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions .16. I. 16 These figures are for the years 1154-1164 and 1172-1194. The political rise of this family coincided with marriagesthat linked it with other noble families. from 1122to 1153. Codice Diplomatico. 16 One family. p. All information in this article regarding holding of posts is based on these sources.'4 Similarly. p. was reportedly worth 10. The booty broughtto Genoa after a raid against Pisa in 1129. 17 The della Voltas also gained control over the archbishopric. 38. pp. as history indicates. Serie. 13 Annali. thereby generating.13 Moreover. 14 Day. 6.
Between 1155 and 1161. was able to achieve similarpossessions duringthe first half of the century. '8 Annali.9 percent of the posts from 1154 to 1164 and 65. Castros.20As a contemporaryannalistreports. 1162: 1. The faction seems to have held 54. 1nComune. see Vitale. For discussion."21 Historianshave noted some of the foregoingpolitical phenomenaand conjectured that they reflected broader strugglesbetween the emperor and the Pope or rivalry between various Genoese clans.201 on Wed. "civil discords and hateful conspiracies and divisions had arisen in the city on account of the mutualenvy of the many men who greatly wished to hold office as consuls of the commune. "Institutional Foundations. and Greif. for example. 22 For these general assertions. see Vitale. 20 percent.145 (regression with respect to time yields a positive and significant coefficient). 1158: 6. II. acquiredpossessions in Spain. 20 Annali (1164-1169.587. vol.851. "Genoese Trade" (for the years 1155-1164). Spinolas. 21 Annali (1190). in which some families detailed exposition of the issue.19 Internalstrife replacedthe peace that had prevaileduntil midcentury. and others under their patronage.852." This content downloaded from 130. Genoa's political system shifted toward an autocracy. For "fellow men" who fought together with the faction see.217. I.16. Genoa's trade substantially expanded. But each of these hypotheses can at best accountfor only some of the phenomena. and 1186: 12. 1160: 11. II. For doubts regarding the validity of these assertions. 219-20. 213. 1164: 5. p. II. 1161: 8. see Byrne. and Ventos.604. 1182: 7.830. although smaller than Genoa. Following the acquisitionof possessions. however. For the relative investment in trade. were the Embriacos.18 By and large. North Africa. In the second half of the twelfth century. vol.379. this increase in possessions can not be attributedto any major change in the political situation outside Genoa. Annali (1188-1189). Guertios. The annals indicate two periods of civil war-from 1164 to 1169 and from 1189to 1194.179. 1nComune. and Codice Diplomatico. vol. 1156: 5. 1157: 7. Peveres. Important clans that supported the della Voltas at various times. 1163: 2.5 percent from 1172 to 1193. The families that dominated this trade were those that marriedinto the della Volta family and held most of the consulate posts. consuls were very active in acquiringpossessions.740. Sicily. "Institutional Foundations. as indicated by the fact that Pisa. Italian City-Republics.These conflicts exhibiteda clear pattern:consuls and their "fellow men" were challengedmilitarilyby other Genoese. and Greif. vols. One source indicates that the amount invested by them and their business associates was 85 percent. 1189-1194). reveals the rationalebehind seemingly unrelatedpolitical and economic events. however. Byzantium. II. pp. 19 Giovanni Scriba and Oberto Scriba reflect the following trade investment (in lire): 1155: 949.22 Examiningthe interactionsbetween the economic and political spheres. p.880. was concentrated at the hands of a few families. 1159: 1. Genoa gained possessions all over It reaffirmed its privilegesin the CrusaderStates and the Mediterranean.146. see Waley." Three unrelated sources indicate that these consular families alone invested at least 27 percent. and in various cities on the French coast. and 32 percent. Its profitablelong-distance commerce. for example.Political Systems and Economic Growth in Genoa 275 After 1154. their business associates. 6. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions .
Whether the della Volta faction's desire to maintainpolitical control reflected greed or love of power. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions . p. The faction's control. its natureis suggested by the fact that subsequentelections constantlybroughtmembersof the della Volta faction to power. may have been most profound in the Crusader states. over Genoa's possessions. For a group of Genoa's nobles to control the consulate to the exclusion of other Genoese. its dominancein the tradewith the Crusaderstates seems to have resulted from its imposition of a discriminatorytariff. see Annali (1239). without marriages. 25 The hypothesis that their commercial dominance provided the foundation for their political dominance is examined and rejected in Greif.23 Once the agreement's self-enforceability was assured.families whose supportwas essential to the della Volta's control were rewarded by being provided de facto propertyrights.26The expropriated rent in turn was used to enhance the faction's political control by enabling it to establish a patronagenetwork through which other Genoese provided it with political and militarysupport in return for a preferred access to Genoa's possessions. p."24 Although the annals do not provide details regardingthis change. 24 Annali (1154). 153. IV. their agreement regarding the division of the costs and benefits of control had to be self-enforcing.201 on Wed. 153. Genoa's Response. regarding Constantinople." p. The marriagepolicy of the della Volta family and those related to it was what enabled them to gain control over the consulate. Genoa's annals report that in 1154 these families changed the election process so that the "best citizens would be elected. "Institutional Foundations. I. 27 See for example. vol. For recognition of the strategic value of political marriages. Marriagesenhanced selfenforceability because they created an additional dimension to the interactions between these families that increased the cost of reneging on the agreement. 48. "Genoese Colonies.16. the faction used its control to expropriatethe rent from Genoa's possessions and to dominatetrade. however." 26 Byrne. in some cases in the form of a lease.25 For example. In particular. vol.276 Greif acquiredde facto propertyrights over the consulate that enabled them to expropriate the rent from Genoa's possessions." regarding the Embriaco family in the Crusader states. The ability to expropriatemotivated these consuls to acquirepossessions. and Byrne "Genoese Trade. the della Volta faction turned to enhance its control over the consulate by altering the consuls' election process. the consuls were motivated to acquire posses23 In other words.179.27 Because the della Volta faction expected to maintain long-term control over the consulate and because possessions were used to strengthenthat control. The sunk act of marriage increases the cost of deviating. This content downloaded from 130. Day. the appropriate game does not have a coalition-proof NE. whereas at the same time other Genoese were discouragedfrom cooperatingwith them and even motivated to militarilychallenge their control.
that is. whereas the value of the marginalsupporter (in terms of the probabilitythat the faction would survive) decreases with the number of supporters.179.29When not challenged by its opposition. fn. the per-period gross expected income will be referred to as "rent.28 This analysis not only illuminatesthe general interrelationsbetween the economic and political histories of Genoa. The acquisitionof possessions graduallyincreased Genoa's trade and hence the potential return(either from officialrewardor rent expropriation) to any Genoese from being a consul. As long as the return was low. Ususmaris. For any given rent. But how did the faction-the strongest military power in Genoacommit to reward its supportersin the future? To address this question. the numberof those who providedit with political and militarysupport. and the faction was militarilychallengedby other Genoese who wished to profitfrom being consuls.Political Systems and Economic Growth in Genoa 277 sions.30(Henceforth. the extent to which it could commit itself to future rewards for those under its patronage. but can be expanded to indicate the rationale behind the timing of the civil wars. 103. leading families in the opposition were the Avvocatos. as long as having control and wealth are substitutes in the "faction" 's utility function. it is useful to sketch a simple model that captures the essence of this commitment problem. it may not have been profitable for nonfaction members to militarily confront the della Volta faction. 29 The analysis holds even if the faction derives utility directly from having control. After possessions were acquired. The faction's ability to withstandits opposition was determinedby the extent of its patronage.16. the faction has an optimal numberof supporters that reflects the trade-offbetween consumingrent in the presentor using it to rewardsupportersand thus to increase the probabilityof continuing to gain rent in the future. The optimal numberof supportersincreases with the size of the rent because a higher rent increases the present After 1164.At the end of each period it survives. See the discussion in Day.") For simplicity. 28 This content downloaded from 130. this was no longer the case. a faction's probabilityof survival(throughthe next period) and the total payment to its supportersincreases with the current period's number of supporters. In other words. assume that a potential supporter can and will commit to assist the faction if he is requested to do so and if the faction can commit to compensate him. the faction receives gross income that it can either consume or use to reward supporters. Uncovering this rationalerequiresexaminingthe limits on the autocraticrule of the della Volta faction. and Pevere. however. It determined the value of the goods the members brought to Genoa. 65. the semiautocratic control of the della Volta faction mitigatedthe collective-action problem.201 on Wed. Genoa's Response. Grillos. 30 In twelfth-century Genoa this trade-off resulted from the extent to which the faction enabled its supporters to invest in trade. p. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions .
But this number is also an upper bound on the number of supporters to whom the faction can commit. the della Volta faction's rent.defeated the city of Milan.16. Genoa agreed to help him conquer Sicily. II. vol. took advantageof this situationto wage war against Genoa. if it is united simply by its common goal of overturning the faction. Because such a spin-off reduces the military might of the faction. an oppositiongroupmay findit an appropriate time to challenge it. 34 For example. Hence theory predicts that a decline in rent will lead to loss of supporters and an attack by the faction's opposition. Furthermore. the smallest amount since 1155. in 1162. Hence a reduction in rent implies a "spin-of' of supporterswho would now cease assisting the faction. 1. pp. asymmetric information regarding this number is likely to prevail. The analysis presented below. The value of trade was.33Althoughthere is less to gain from capturingthe consulate. its bitterrival. pp. 86-98. whether expected or not. FrederickI Barbarossa. When such a challenge takes place.3sThese events diminished.most likely. and theory predicts that this should have led to a loss of supporters. In returnfor the emperor's recognitionof its autonomy. see Annali (1162). It requires only the recognition that the extent of rent limits patronage relations and that a decline in the magnitude of the faction's rent had occurred. there is also a higherprobabilityof gaining. 35 Annali (1164-1165). These theoreticalpredictionsare confirmedby the historicalrecords. In 1162the Germanemperor. there is a subgame perfect equilibrium in which the faction hires the optimal number of supporters. thereby increasing the profitability of an attack by the 31 In reality. its strength may be increasing as the controlling faction spins off supporters. decreases the numberof supportersto whom the faction can commit. the marginalvalue of supporters temporarilyincreases. which stood in the way of his reaffirming control over Italy. 127-33. Pisa. Two Italies.201 on Wed.31 It cannot commit ex ante to rewardin the futuremore supporters than would be optimalex post. As described in subsequent discussion. I. 33 The opposition strength is not likely to be negatively affected by the reduction in rent because it does not use expropriated rent to establish a patronage system in any case. This content downloaded from 130. The hostile responses of Barbarossa'sfoesthe king of Sicily and the Byzantine emperor-forced the Genoese to forbid all trade with Sicily and the eastern Mediterranean. but there is no subgame perfect equilibrium in which the number of supporters is larger. and Abulafia.278 Greif value of future rents.34 Moreover. hence the faction would find it optimal to spend more resources on recruiting supporters each period to increase the probabilityit would survive. the reduction in the della Volta faction's rent resulted from observable political changes around the Mediterranean. however. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions . Although the faction would like to extend the size of its patronage network. The faction can commititself to rewardthis optimal numberof supportersin the future because it is known ex ante that having this numberof supporterswould be optimalin the future as well.179.370 lire.32 A decline in rent. it is unable to do so because a larger number of supporters would not be optimal ex post if the faction survives. 32 In other words. vol. is a comparative statics analysis.
"40 The semiautocraticrule of the della Volta faction over Genoa from 1164 to 1193 provided a political foundation for economic growth. in 1191 Genoa's trade with Sicily suffereda severe blow as Genoa. II.16. although the della Volta faction regained its control over the consulate.201 on Wed. Genoa's annals explicitly report fighting between the della Volta faction and "part of their [former]adherents. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions . after additional possessions were acquired. pp. Genoa lost its privileges in Constantinople. p. The military technology available during this period made defense superior to offense. pp. constrained the resources the consuls could use. 86ff. had to join a war between the Germanemperor and Sicily. Finally.In 1187another war broke out with Pisa. 127. which included some of the faction's previous supporters.Political Systems and Economic Growth in Genoa 279 faction's opposition. once again. 38 Hughes. II. Between 1182and 1187.36 In 1172. to acquire possessions and thus limited the extent of trade Annali (1162). 215. Annali. captured most of the Genoese possessions in the Kingdom of Jerusalem. It mitigatedthe problemof collective action by skewing the distributionof rents from Genoa's possessions. At the same time. who ruled Egypt.38 Hence. Annali . vol. Yet the skewed distribution of rents. vol.37Yet the increase in the relative strengthof the della Volta faction was not sufficientto eliminate its opposition. "Kinsmen and Neighbors. which was expected ex post. ex ante. 36 This content downloaded from 130.179. not surprisingly. (in particular. The della Volta faction attempted to restore its fortune by facilitating and participatingin the Third Crusade. and Saladin. 143-47 (the Guertio family). well protected by defense towers. The Pevere and the Ususmaris families left the faction. vol. vol. Genoa's Response. I. a war between Genoa and the king of MajorcaprobablydamagedGenoese trade in the west. This skewed distributionmotivatedthe ruling faction to devote its human and financial resources to acquire more possessions. it was unable or unwilling to bear the cost of completely rooting out its opposition. p. II.39 It is interesting to note that former faction members-in particularthose unrelated by marriage or blood to the della Voltas-ceased their support of the faction. Indeed. and Day. 227 (the Vento family). p. vol. and throughoutthe twelfth century Genoa's noble families pursued a policy aimed at having family members and supporterslive in close proximity. a series of events adversely affected Genoa's trade and hence the della Volta faction's control. 132). 37 From 1164 to 1171 the della Volta faction held only 41. in 1162fights occurred between members of the faction. but its opponents took advantage of the faction's relative weakness and strove to gain control over the city-state.3 percent of the total consular posts. In 1182. p. the della Volta faction rose to power again. 40 Annali (1192). and in 1164 these fights turned into a civil war between the della Volta faction and its opposition. 230 (the Spinola family)." 39 Annali (1189). II.
123. Genoa increasinglyused the resources of only a subset of its residents and had to bear the cost of civil wars. Factions were still motivatedto devote resources to enhance their relative strength.201 on Wed. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions .42 The length of the civil wars indicates that benefits from cooperation were not sufficient to bring about such a political system. A partial and unsuccessful move toward establishing such a system was made in 1170. thereby increasingits rent and securing its control. Indeed. when neither the della Volta faction nor its opposition could recruit enough supportersto ensure undisputed control. so that the Genoese could resume trading with Constantinople.179. both sides could have benefitted from institutinga political system able to bring an end to the civil war and facilitate cooperation in acquiringpossessions. 61 percent of the loan given in 1171 to the Byzantine emperor to finance his war with Venice. participants would have to have known that the allocations of gains agreed upon would be self-enforcing ex post. The civil war of 1187 to 1194 was very destructive. such a division was neither stable nor likely to yield much gain from cooperation. A political system that reduces that marginal return. Genoa's Response. Day. The cost imposed by the system was particularlyevident during the civil wars. was given by three faction members. 1I. whereas total wealth and each faction's wealth decrease with this marginal return. 132. The equilibrium level of resources devoted to distributive activities is positive and increases with the marginal return to such activity. This content downloaded from 130. is Pareto improving. therefore. vol. 42 Consider a game in which each faction decides how to allocate its resources between wealth-creating activities or activities aimed at distributing the wealth created by the actions of both factions. by 1172 the della Volta faction had regained its control over the consulate. p. 43 Annali (1170).280 Greif expansion.16. as each faction 41 For example. Neither side was strong enough to face its local rival and. For this to have happened. Clearly. they in essence tried to alter the allocation associated with the existing system. when Genoa faced a severe threat from a large Pisan army. Clearly. p. and a faction able to increase the rent available to it was in a better position to expand its political control. Genoese not directly involved in the factional fights arranged to divide the consulate equally among the factions. acquirepossessions. To supportthe growthof trade. This threat most likely reduced the expected return to each faction even if it won.43 Instead of changing the political system. at the same time.4" THE PODESTERIA AND ITS ECONOMIC IMPLICATIONS The semiautocraticrule of the della Volta faction entailed inefficient use of resources because the faction and its opposition devoted resources to gain a greater share of Genoa's wealth instead of acquiring possessions. The payoff to each faction increases with the total resources devoted to wealthcreating activities and its relative allocation of resources to wealth-distributing activities.
responded by devising a new political system that Annali (1 189-1193). Henry's seneschal advised the della Volta consuls to accept a podesta who would administer the city. and Day. but Genoa. 47 Annali (1194). pp. In 1194. vol. II. 48Annali (1194). 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions . 147-49. see De Negri. 4 4 This content downloaded from 130. pp. to use a similar system to control Italy.179. 100-101. the Genoese endeavored to change their system only when they faced a severe external threat that decreased the economic rent that would be availableto the winningfaction. vol. -however. For discussion. refused to recognize Otto as a podesta and. vol.44 however. It was abolished upon their return. 234-35. Obertode Olivano of Pavia was nominatedpodesta for one year. During the twelfth century.201 on Wed. 204-12.45The transitionto the as a single executive administrator podesteria in Genoa was influencedby the attemptsof Frederick's son. who also fought on behalf of the emperorbut waged a surpriseattack on the Genoese.47 Duringthe Siciliancampaign. He nominatedan outside podesta (that is. 51-55. p. threatenedto destroy the city if the Genoese daredto sail the sea. II. could not give him naval support. pp. Henry organized an attack on Sicily. pp.the Genoese had ample opportunitiesto learn the benefits of cooperation and to realize that continuing the existing political system could lead to de facto subjection to the emperor. Abulafia. vol. a "power") in these cities. 239. see Vitale. Under his direction.the Genoese replaced him with Otto di Carreto. Genoa's Response. Breviario. the emperor Frederick I Barbarossaattempted to control the Italian cities he had defeated. 231-32. By establishing a similar system. used siege machines to destroy the other's fortifications. In particular. Presentingthis threatand understandingthe origin and nature of the new political system that resulted from the crisis-the podesteria-requires some elaborationof the relevant history. Breviario. II. and Vitale. probably hoping to force his own choice on Genoa.49The Genoese. the Genoese factions cooperated and supported the emperor. Two Italies. Henry VI. 299-308.48The emperor. For discussion. who probablyintended to control Genoa by having the city administeredby apodesta nominatedand motivatedby him. See the Annali (1190-1191).Political Systems and Economic Growth in Genoa 281 As in 1170. II. II. several Italian communes experimented with political systems guided by a single executive administrator nominated by the commune. Hyde. paralyzed by the civil war.16. 49 Annali (1194). 240-41. who conquered Sicily during 1194. Society and Politics.46 Given the deadlock in the fighting and the high cost of failing to provide naval support (losing future trade with Sicily and alienatingthe emperor). Hence.cooperation enabled them to defeat the Pisans. pp. pp. Storia.the della Volta faction conceded. after which the consulate was to resume. I For similar reasons a podesta was installed in 1190 when many members of the della Volta faction were still taking part in the Third Crusade. pp. vol. when theirpodesta died duringthe campaign.
II.16. Furthermore. there was no reason for it to reward the podesta. Hence he could credibly be impartial and retaliate against people who broke the law ratherthan against a faction as a whole. p.282 Greif enabled cooperation. Similar restrictions applied to his so The following discussion is based on the Annali. p. This fact has led historians to conclude that he was militarily superior to the factions. and made powerfuland economicallyprosperousthanever. Genoa's eminent historian. vol. buying property. p. Parties. II Comune. p. Vitale (Breviario.5" podesta's militarysuperiority become a dictator?Understandingthe was so why didn't the podestaif success of the podesteria requires analyzing how the introductionof a new player. and the numberof soldiers he had to bringwith him was specified in his contract. Vito Vitale. 51-52) rejects previous hypotheses regarding the transition to the podesteria and concludes that it reflects a need to pacify the city. By the "threat" of assisting the other faction he deterredeach faction from attemptingto take control over the city or act "illegally. implicitly arguedthat gains from cooperationensured the system's functioning. Breviario. II Comune. why were these gains insufficientto guarantee cooperation under the consulate? It has also been claimed that the If this enabledhim to controlthe factions. however. For limited military action. after which he had to leave the city and not returnfor several years. During his deliberately short period in office. Indeed. see Annali (1190).If this was so. and administrator supported by soldiers and judges he had to bring with him.201 on Wed. and Waley. 150). this reward scheme made it in the podesta"'s interest not to alter fundamentallythe balance of power among the factions. the podestd could act against certain people without provoking a factional response.52 If this hypothesis is correct. getting married. SI Vitale. Political historians have noted that the administrationof Genoa by the podesta pacified and unified the city. 206.or managing any commercial transactions. and Heers. Day (Genoa's Response. conjectures that the transition was masterminded by the della Voltas' opposition. 9. If one faction took control over the city. Vitale. pp. the podesta . judge. 220. Yet the reasons for its success have remained elusive.179. The term of the podesta was limited to one year. This content downloaded from 130. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions . the functioningof the podesteria critically dependedon each faction's inabilityto committo rewarda podesta who cooperatedin the destructionof the other faction. because the podesta was to receive a high wage at the end of his term. Yet (probably with the assistance of Genoese not affiliated with any of the factions) he enabledthe factions to cooperate by creating a military balance among them. this threatwas credible." Moreover. mitigatedthe collective-actionproblem. alteredthe strategicinteractionwithin the city. 52 On the equilibrium path.50 Genoamore militarily At the center of Genoa's podesteria was a non-Genoese podesta. The podesta' was not militarilystrong enough to become a dictator. the podesta' was restricted from socializing with Genoese. and hired by the city to be its militaryleader. Vitale. attempts to inhibit a faction's ability to commit are reflected in the podesteria regulations. Italian City-Republics.
A consul deposited a bond to guaranteeproper conduct and was prohibitedfrom receiving donations worth more than half a lira or to undertakeany commercialventure." The conscious attempt to keep the podesta from factional influence is also reflected in the identity of the rectors who assisted him and who were not. the political rise of the popolo (that is. the non-noble element). 166. 122-25. policy setting was separated from policy implementing. The Genoese podesteria formally lasted about 150 years. for example. who did not have legislative powers. Genoa's possessions were administered by a consul sent from Genoa for one year. At the end of his term.Political Systems and Economic Growth in Genoa 283 relatives up to the "third degree. To mitigatethe collective-action problemand to ensure a (relatively) impartial political system. Breviario. see. 69. but a hired administratorgoverned its execution. See Olivieri. 111ff. he was offereda high. and the conflict between the Pope and the emperor that affected Genoa during the thirteenth century. pp.201 on Wed. Yet the podesteria retained the same basic structurethroughoutthis period. Major policy decisions had to be approvedby a gatheringof all Genoese with "full rights. Genoa's obligations toward a particular podesta were honored. 1202. Rather. care was taken to prevent any family from establishing de facto property rights over Genoa's possessions and to provide all Genoese with access to them. was to follow the policy set by these bodies.pecuniaryreward. and by enabling cooperation. on the very same ship. Genoese who expected to benefit from the long-runincrease in the volume of trade determinedthe city's policy. by and large. and misconduct implied a penalty to be paid before he was allowed to leave the town. 1205. and 1206. members of the families involved in the factional wars. At the same time. Hence. the consul had to returnto Genoa as soon as his successor had arrived."55In 1195. For conscious attempts to forestall a family from achieving de facto property rights over possessions. To motivate the podesta to follow the set policy.S4To restrict the ability to extract rent from Genoa's possessions.A "Council" having at least eight representativesfrom each of Genoa's eight districts determinedpolicy and legislation. it broughtabout the "the golden age of Genoa." The podesta. and their structuremade it difficult for any faction to manipulate Genoa's policy to its own advantage. Serie. for the years 1196.. during which it faced many challenges as a result of temporary imbalances between factions.179.16." To ensure that no faction would be able to extend its patronagein a destabilizing manner and to motivate the factions to participate in acquiring possessions. because otherwise the city's ability to hire another highqualitypodesta would have been diminished. ss Vitale. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions . Before the end of the term his conduct was assessed. 1203. Day. S3 54 This content downloaded from 130. Genoa's Response. 1199. p. they were not leased for a prolongedperiodnor were specific families allowed to establish de facto propertyrights over them. yet conditional.
Society and Politics. By 1314 Genoa's (nominal)trade was more than 46 times that of 1160. each of which had less than threequartersof Genoa's wealth. Only when an outside threat made the cost of this system extremely high.16. the 56 For details see Greif. did the Genoese take advantage of organizational innovationsto implementa new political system. 58 Bairoch et al. Genoa was estimated to be the richest of the Lombardcities.and patronage. winter navigation. This trend is remarkablydifferentfrom that of Venice.201 on Wed.179. destroyed Pisa-its rival in the western Mediterranean-successfully confronted Venice-its rival in the eastern Mediterranean-and acquired possessions all over the Mediterranean. By and large. marriage. innovations appearedfirst in Genoa and later in the oligarchy of Venice. Examples include double-entry bookkeeping. Although the system successfully mitigatedcollective-action problems.57 Rapideconomic growthafter the institutionalization of the podesteria is also suggested by Genoa's population growth. This content downloaded from 130. which doubled between 1050 and 1200 and then increased another 230 percent between 1200 and 1300. A calculation of the yearly rate of growth of trade. its economic costs were high.284 Greif Genoa began to reassert its control over smallersurrounding cities. Althougheach of the availablemeasuresfor estimatingthis growth is imperfect. "Institutional Foundations.58Its economic vitality is also indicated by product specializationand organizational innovations. Genoa increasingly used the resources of only a subset of its residents and had to bear the cost of civil wars. Genoa's militaryand naval strength led to unparalleledeconomic growth. the Black Sea. Genoa was the second-largestcity in Northern Italy. and in the next hundredyears the city completely freed itself from the rule of the Holy Roman Empire. The Genoese also dominated the direct trade between Europe and the Far East and were the first to advance toward the Far East via the Atlantic. which experienced a rate of populationgrowth of 50 percent in each of the correspondingperiods.56 Around this time. To support its trade expansion. followed by Milan and Venice. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions . indicates that from 1160 to 1191 the rate of growth was 4 percent. Population. whereas from 1191to 1214it rose by 50 percent (to 6 percent). and beyond. and mintingof gold coins. This system. they uniformly indicate spectacular economic performance relative to Genoa's past and relative to Venice. although limited by data availability. CONCLUSIONS The political system that supportedGenoa's initial economic development was based on lineage. marine charting. insurance. 57 Hyde." The Genoese lira lost about 35 percent of its value between 1155 and 1255. In 1300..
By contrast. Genoa's trade expansion was restrictedbecause the collective-action problem was not mitigated. "Path-Dependence.6' The podesteria was a practical political system because it built on the existing factional structure. the endogenous process throughwhich the "ruler" emerges. Previous studies have illuminatedthe economic implications of the need to constrain rulers from abusing rights and of political conflicts among factions whose boundarieswere taken as given. It may not be a coincidence that Venice also had a limited hinterland. The resulting relative lack of overseas possessions. however.179. 22 May 2013 23:19:32 PM All use subject to JSTOR Terms and Conditions .59 At the same time. it seems to have crucially shaped its political history.16. This alteration facilitated interlineagecooperation and mitigated the collective-action problemmainlyby introducinga new player into Genoa's politicalgame and by separatingpolicy setting and policy implementing.Political Systems and Economic Growth in Genoa 285 podesteria. Genoa's history indicates the importanceof examining the institutionalbasis that determines the boundaries of political factions. enabled additional economic expansion by altering the incentive structure that the Genoese factions faced. History was importantin Genoa's political and economic development. economic opportunities and development influenced politicalchanges. ' On the theory of path-dependence. The insight provided by Genoa's political and economic histories substantiallydiffers from that offered by other studies of the political foundation of economic growth. The historical process of experimentingwith and learningabout different institutionalarrangementsinfluenced political changes. thereby makingit vulnerableto external shocks. More generally. Genoa's politics exhibited path-dependencein being incapable of evolving significantlyaway from the forms and functions shaped by its historical origins. the dominanceof the della Volta faction mitigatedthe collective-action problemand thereby fostered trade expansion but forestalled cooperation. Similarly. the economic development brought about by this control of holdinga consularpost to other Genoese as increased the profitability well as eventually leading to the transitionto the podesteria system. The della Volta faction had to rely on variable rent from overseas possessions to ensure its control. At the same time. enabled cooperation in economic endeavors such as pirateraids. Each of Genoa's political systems had distinct economic ramifications. disregardingthe question whether Genoa's relatively small hinterland was a product of history or of geography.201 on Wed. because each entailed a differenttrade-offbetween mitigatingthe collective-action problem and enabling cooperation." has noted the historical contribution of autocracy to economic growth." This content downloaded from 130. Before the rise of the della Volta faction. "Dictatorship. the " Olson. see David. The control of the della Volta faction was made possible by its ability to extract rent from overseas possessions.
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