The Organisation of Markets as a Key Factor in the Rise of Holland, Fourteenth-Sixteenth Centuries. A Test Case for an Institutional Approach

Although the importance of the institutional approach for understanding pre-industrial economic development is widely accepted, it has proven to be difficult to assess, let alone to quantify the effects of institutions on the functioning of markets in this era. In this paper we demonstrate to what degree our empirical research on the rise of markets in late medieval Holland can illuminate the factors behind the development of the specific institutional framework of markets for land, labour, capital and goods, and the effects of these institutions on the actual functioning of the markets. The findings are corroborated by a comparative approach focusing on Flanders and Eastern England: the parts of Northwest Europe where, next to Holland, economic development was most precocious. Both regions, however, were hit hard by the effects of the Black Death, whereas Holland after the mid-fourteenth century underwent remarkable further growth, even despite ecological difficulties. The favourable organisation of markets, enabled by an exceptional balance in Holland society, played a key role in this success