to foreign military ventures and domestic protectionism on the part of the French royal
government. But this does not alter the fact that the fairs’ initial decline around 1300
was due to decisions by the French crown which hampered or altogether prevented
participation in the fairs by both major components of its clientele - the Flemish and
the Italians - and that none of the regulations subsequently introduced by the French
state removed this fundamental obstacle to the fairs’ recovery.
The reasons for the decline of the Champagne fairs from the late thirteenth century
onwards are thus the obverse of the reasons for its preceding success. The French
regime that took over the fairs after 1285 ceased, bit by bit, to provide the generalized
institutional mechanisms that had attracted and sustained international trade. Security
of property rights, contract enforcement, and access to commercial infrastructure were
no longer guaranteed as generalized institutional services but rather became
particularized ‘privileges’ offered (and denied) in order to serve the short-term
interests of French royal policy. The public authorities no longer offered a level
playing-field to all merchants - domestic or foreign, allied or non-allied - but rather
granted privileges that favoured particular interest-groups and discriminated against
others. International trade at the Champagne fairs fell victim to this shift from
generalized to particularized institutional provision.
4. The Champagne Fairs and Private-Order Contract Enforcement
What implications do these findings have for the lessons some economists have drawn
from the Champagne fairs concerning the institutional basis for impersonal exchange
and market-based economic development? The most influential economic precept
derived from the fairs is the idea, advanced in 1990 by Milgrom, North and Weingast,
that private-order contract enforcement is sufficient to support international trade and
that a public legal system is not required. Milgrom, North and Weingast argue that the
Champagne fairs fostered international trade through private-order courts in which
private judges kept records of traders’ behaviour. Before agreeing any deal, merchants
would ask a private judge about the reputation of their potential trading partner. By
communicating reputational status of traders on demand, the private judges enabled
merchants to boycott those who had previously defaulted on contracts. The private
judges also are also supposed to have levied fines for misconduct, which merchants
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