Property Rights and Contract Form in Medieval Europe

Alexander Volokh, Emory Law School

Abstract

This article contributes not only to to the literature on medieval economic history but also to the contract-theory literature on the boundaries of the firm and to the development literature on agricultural contracts.

Throughout western Europe, beginning about 1200, leasing of feudal lords' estates became more common relative to direct management. In England, however, direct management increased beginning around the same time and until the fourteenth century, and leasing increased thereafter.

This article models the lord-peasant relationship as a game where contract form is chosen as the result of a tradeoff between incentives for high effort and excessive risk-bearing. Leasing increases as peasants' living standards improve. As for England, the increase in direct management can be explained by property law innovations that increased the security of freehold tenure, and the increase in leasing can be explained not only by improving living standards but also by increasing security of leasehold tenure.