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"Mechanism Design in the Venetian Republic"

Dalibor Rohac, Cato Institute:

Over time, intricate political institutions developed, which not only ensured peaceful transfers of power but also restricted the power of the executive and created a climate conducive to business. Because Venice had no land and no natural resources, there was no point in setting up extractive feudal institutions, which were pervasive in Europe at that time. Instead, its institutions emerged to protect commerce, rather than extract resources—although evidence suggests that the capture of the government by the merchants later contributed to the economic stagnation of the city-state.

Link courtesy of Patrick Sullivan.