The System of Governance, Wise Policies, and Market-Friendly Institutions

Abstract

There appears to be a strong consensus in the historical literature that Ragusa was indeed economically very successful in these centuries, rivalling or at least approaching the prosperity of much larger Italian city-states like Venice, Florence, Bari, and Ancona. This is manifested in measures of the wealth of its elite and the apparent wide extent of its trading activities, and is confirmed by data on the size of its shipping fleet which until 1600 was in the same league as top maritime powers like Venice, England, and the Netherlands. While on these facts there is little dispute, what makes the literature interesting is differences about what explains its success: how could such a tiny entity do so well? The Carter’s book (1972, p. 550) is typical in its aim to show “how a small republic with few natural advantages could grow and develop mainly through her function as a trade and political intermediary between the underdeveloped regions of the Balkans and Levant, and the more developed regions of western Europe.”