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Institutions of Hanseatic Trade

Studies on the Political Economy of a Medieval Network Organisation

Ulf Christian Ewert and Stephan Selzer

The merchants of the medieval Hanse monopolised trade in the Baltic and North Sea areas. The authors describe the structure of their trade system in terms of network organisation and attempts to explain, on the grounds of institutional economics, the coordination of the merchants’ commercial exchange by reputation, trust and culture. The institutional economics approach also allows for a comprehensive analysis of coordination problems arising between merchants, towns and the ‘Kontore’. Due to the simplicity and flexibility of network trade the Hansards could bridge the huge gap in economic development between the West and the East. In the changing economic conditions around 1500, however, exactly these characteristics proved to be a serious limit to further retain their trade monopoly.

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Chapter 6 Competitive Advantage or Limit to Business? – Contingency and Path Dependence


The Context of the Hanseatic Network Organisation

So far, we have shown in the previous chapters that the organisation of Hanseatic trade during the late Middle Ages was in many ways shaped by the principle of network organisation, and we provided arguments as to why this system of trade was instrumental to Hanseatic merchants in operating their commercial activities efficaciously and efficiently, at least from a short-term perspective. However, was this kind of structure also beneficial in the long run in creating a competitive advantage for the merchants, or did it tend to turn into a limit to their business? Or, to put it in a more abstract way, what effects did the Hanse’s network organisation produce in general?

To answer this question, two levels of potential impacts of the network organisation have to be distinguished. On the one hand, it is necessary to explain to what extent the form of network enterprise was an economically effective tool at the individual level for Hanseatic merchants in operating their trade. On the other hand, it would also be essential to assess the manifold repercussions this form of trade organisation had on economic development, growth and welfare in Northern Europe. So, both microeconomic as well as macroeconomic features of the Hanse’s network organisation shall be examined. Due to a rather poor basis of sources, the latter aspect seems to be far more difficult to analyse than the former. This is also because, unlike individual economic effects,...

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