The Islamic commercial crisis: Institutional roots of economic underdevelopment in the Middle East

Journal Article (Journal Article)

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.

Full Text

Duke Authors

Cited Authors

  • Kuran, T

Published Date

  • June 1, 2003

Published In

Volume / Issue

  • 63 / 2

Start / End Page

  • 414 - 446

International Standard Serial Number (ISSN)

  • 0022-0507

Digital Object Identifier (DOI)

  • 10.1017/S0022050703001840

Citation Source

  • Scopus