Three Essays in Political Economy with Applications to the Hanseatic League

Alexander Fink

Advisor: Dr. Peter J. Boettke

Committee Members: Dr. Peter T. Leeson, Dr. Virgil H. Storr, Dr. Richard E. Wagner

May 03, 2011, 10:30 AM to 11:00 AM


This dissertation is devoted to an economic analysis of phenomena related to the medieval Hanseatic League. The first essay analyzes the interaction between medieval European cities and their overlords.  During the Middle Ages, European cities were to various degrees autonomous.  I argue that in return for lump sum tax payments territorial rulers delegated the supervision of cities to groups – mostly merchants – that were better equipped to foster trade within the city limits.  Merchants had superior knowledge to implement attractive rules for the settlement of conflicts and devised institutions that reduced the potential for public predation.  I further argue that rulers of smaller territories facing relatively mobile subjects tended to delegate more powers to cities.  I provide evidence in support of my contentions from central Europe during the high and late Middle Ages.  The second essay analyzes the Hanseatic League in light of the concept of functional overlapping competing jurisdictions proposed by Frey and Eichenberger (1996, 1999).  I find that the Hanseatic League provided its members with a limited set of functions and overlapped and competed with other jurisdictions, but whereas from the perspective of individual citizens of Hanseatic cities the League was a governmental unit, for the collective of each city the League was rather a club of city governments than a government itself.  The third essay aims at providing a discussion of the conditions affecting the feasibility of social contracts.  Social contractarians commonly take social contracts to be solely hypothetical and refrain from elaborating on the factors that influence the feasibility of the formation of social contracts.  I argue that genuine social contract becomes more feasible the more aligned the preferences of group members for public goods are, the more the individuals share similar social norms, and the smaller the group is.  I provide evidence in support of my contention from the medieval Hanseatic League.  At the Hanseatic Kontor in Novgorod, one of the four major trading posts of the Hanseatic League in cities outside of Germany, German merchants agreed to live under the rule of a constitution that gave rise to a political authority for the Kontor society.