The Islamic commercial crisis: Institutional roots of economic underdevelopment in the Middle East
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During the second millennium, the Middle East's commerce with Western Europe fell increasingly under European domination. Two factors played critical roles. First, the Islamic inheritance system, by raising the costs of dissolving a partnership following a partner's death, kept Middle Eastern commercial enterprises small and ephemeral. Second, certain European inheritance systems facilitated large and durable partnerships by reducing the likelihood of premature dissolution. The upshot is that European enterprises grew larger than those of the Islamic world. Moreover, while ever larger enterprises propelled further organizational transformations in Europe, persistently small enterprises inhibited economic modernization in the Middle East.
Published Version (Please cite this version)10.1017/S0022050703001840
Publication InfoKuran, T (2003). The Islamic commercial crisis: Institutional roots of economic underdevelopment in the Middle East. Journal of Economic History, 63(2). pp. 414-446. 10.1017/S0022050703001840. Retrieved from https://hdl.handle.net/10161/2599.
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Professor of Economics
Timur Kuran is Professor of Economics and Political Science, and Gorter Family Professor of Islamic Studies at Duke University. His research focuses on (1) social change, including the evolution of preferences and institutions, and (2) the economic and political history and modernization of the Middle East. His current projects include a study of the role that the Middle East’s traditional institutions played in its poor political performance, as measured by democratization and human liberties.