“Verleger” and “impannatori” – The Reduction of Transaction Costs by Middlemen in 18th- and 20th-Century European Textile Districts

Abstract

This paper analyses the impact of middlemen such as putting-out traders (Verleger) and impannatori as promoters of institutional change. The approach is based on the assumption that the economic framework and institutional setting were crucial for the rise and fall of industrial districts. Transformation regularly led to a reduction of transaction costs by replacing the existing institutions with more efficient ones. However, sometimes the interests of socio- economic groups such as guilds placed barriers in the way of institutional change, impeding effective transformation. A further challenge of the paper is the comparison of 18th- and 20th-century developments.