This article provides a critical analysis of Frye (2000) and existing theories of self-governance. Following up on the recent studies by Stringham (2003, 2003), we focus our attention on the emergence of financial markets for several reasons. The common perception is that complicated financial...

In the early stock market in London there were substantial risks of non-payment and fraud. (Mortimer, 1801) According to Hobbesian theory, we would expect stock markets to develop only after government has implemented rules and regulations to eliminate these problems. The historical account,...

This article provides a critical analysis of Frye (2000) and existing theories of self-governance. Following up on the recent studies by Stringham (2002, 2003), we focus our attention on the emergence of financial markets for several reasons. The common perception is that complicated financial...

The common perception is that complicated financial instruments require state sanction to emerge. It is argued that in the absence of state regulation of financial markets, cheating will be common. We argue that the evidence does not support this pessimistic view. In fact, markets are capable of...

Does the emergence of a stock market require a well-developed legal and/or regulatory system? Although historical work by Neal and Davis [Neal, L., & Davis, L. (2005). The evolution of the rules and regulations of the first emerging markets: The London, New York, and Paris stock exchanges,...