01-11-2007, 01:06 AM
Could be very useful book in debunking the myths of how colonial raj brought all these goodies to India.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Full text mirrored at
http://bharatam1.googlepages.com/corporatebharatam.pdf
<b>Khanna, Vikramaditya S., "The Economic History of the Corporate Form in Ancient India"Â (November 1, 2005)</b>.
Available at SSRN: http://ssrn.com/abstract=796464
Abstract
Â
The corporation is the most popular form of business organization. Moreover, as the economies of emerging markets leap forward the popularity of the corporate form continues to grow. In light of its widespread appeal, one is naturally inclined to inquire more about the corporation and how it developed over time. Many questions can be pondered including: where did the corporate form originate; how old is it; has the corporation taken the same form everywhere or have there been local variations; and what are the pre-conditions for the development of the corporate form. All these questions are important not only for their own intrinsic value, but also because of the insights they provide about the development of the corporate sector in emerging markets and about the prospects for convergence, of one kind or another, in corporate governance. Indeed, a series of important papers by Henry Hansmann & Reinier Kraakman and other authors examine these questions both in Rome and in Medieval Europe. The aim of this paper is to explore a number of these questions by examining the economic history and development of the corporate form in Ancient India. The paper finds considerable evidence that urges us toward a significant revision of the history and development of the corporate form.
The examination reveals that business people on the Indian subcontinent utilized the corporate form from a very early period. The corporate form (e.g., the sreni) was being used in India from at least 800 B.C., and perhaps even earlier, and was in more or less continuous use since then until the advent of the Islamic invasions around 1000 A.D. This provides evidence for the use of the corporate form centuries before the earliest Roman proto-corporations. In fact, the use of the sreni in Ancient India was widespread including virtually every kind of business, political and municipal activity. Moreover, when we examine how these entities were structured, governed and regulated we find that they bear many similarities to corporations and, indeed, to modern US corporations. The familiar concerns of agency costs and incentive effects are both present and addressed in quite similar ways as are many other aspects of the law regulating business entities. Further, examining the historical development of the sreni indicates that the factors leading to the growth of this corporate form are consistent with those put forward for the growth of organizational entities in Europe. These factors include increasing trade, methods to contain agency costs, and methods to patrol the boundaries between the assets of the sreni and those of its members ( i.e., to facilitate asset partitioning and reduce creditor information costs). Finally, examination of the development of the sreni in Ancient India sheds light on the importance of state structure for the growth of trade and the corporate form as well as on prospects for some kind of convergence in corporate governance.
Conclusion
India is a country of considerable historical antiquity with a long and successful history of trade. For the researcher, this makes it an enviable environment in which to study the development of business organizations. The analysis in this paper suggests that Ancient India had many different forms of business organization including the sreni. <b>Moreover, the sreni can be dated from a period much older than many would expect for the development of the corporate form â from at least 800 B.C. and perhaps even earlier. This predates, by centuries, the earliest Roman proto-corporations. Further, the sreni was also in continuing and expanding use until 1000 A.D. </b>and was utilized for many different kinds of purposes including business, municipal, social and religious activities. The sreni was clearly one of the most important institutions of Ancient India. When we examine the details of its formation, governance and regulation we find that its development corresponds well to more modern theories about the development of the corporate form. In particular, the sreni grew as trade expanded and as the supply of the monitoring methodologies needed for its development arose. Moreover, when the features of the sreni are compared to those of more modern Anglo-American corporations we find a significant amount of similarity. The members of the sreni faced many similar concerns to those we face today and they found quite similar ways of addressing those concerns. However, when we examine sreni development more closely we find a number of interesting results. The sreni grew the fastest in the state structure where there was an intermediate level of centralization and considerable deference to the sreni in managing its internal affairs. Although trade grew under other structures too, it was the relatively less centralized Gupta Empire that saw the greatest advances in trade. Of course, other factors also influenced the development of trade in Ancient India, but these results are interesting nonetheless. Moreover, the development of the sreni provides some more fodder for the debate about convergence or path dependence in corporate governance. Overall the ability of the sreni to survive and develop in a predictable fashion through so many centuries and such differing environments in Ancient India attests to its resilience and adaptability. Moreover, the Ancient Indian sreni forces us to evise our conceptions of when corporations developed to a much earlier time period. Indeed, much can be learned about the corporation from the Ancient Indian sreni.
http://papers.ssrn.com/sol3/papers.cfm?abs...4#PaperDownload
Email address for VIKRAMADITYA S. KHANNA
University of Michigan at Ann Arbor - Law School <!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Full text mirrored at
http://bharatam1.googlepages.com/corporatebharatam.pdf
<b>Khanna, Vikramaditya S., "The Economic History of the Corporate Form in Ancient India"Â (November 1, 2005)</b>.
Available at SSRN: http://ssrn.com/abstract=796464
Abstract
Â
The corporation is the most popular form of business organization. Moreover, as the economies of emerging markets leap forward the popularity of the corporate form continues to grow. In light of its widespread appeal, one is naturally inclined to inquire more about the corporation and how it developed over time. Many questions can be pondered including: where did the corporate form originate; how old is it; has the corporation taken the same form everywhere or have there been local variations; and what are the pre-conditions for the development of the corporate form. All these questions are important not only for their own intrinsic value, but also because of the insights they provide about the development of the corporate sector in emerging markets and about the prospects for convergence, of one kind or another, in corporate governance. Indeed, a series of important papers by Henry Hansmann & Reinier Kraakman and other authors examine these questions both in Rome and in Medieval Europe. The aim of this paper is to explore a number of these questions by examining the economic history and development of the corporate form in Ancient India. The paper finds considerable evidence that urges us toward a significant revision of the history and development of the corporate form.
The examination reveals that business people on the Indian subcontinent utilized the corporate form from a very early period. The corporate form (e.g., the sreni) was being used in India from at least 800 B.C., and perhaps even earlier, and was in more or less continuous use since then until the advent of the Islamic invasions around 1000 A.D. This provides evidence for the use of the corporate form centuries before the earliest Roman proto-corporations. In fact, the use of the sreni in Ancient India was widespread including virtually every kind of business, political and municipal activity. Moreover, when we examine how these entities were structured, governed and regulated we find that they bear many similarities to corporations and, indeed, to modern US corporations. The familiar concerns of agency costs and incentive effects are both present and addressed in quite similar ways as are many other aspects of the law regulating business entities. Further, examining the historical development of the sreni indicates that the factors leading to the growth of this corporate form are consistent with those put forward for the growth of organizational entities in Europe. These factors include increasing trade, methods to contain agency costs, and methods to patrol the boundaries between the assets of the sreni and those of its members ( i.e., to facilitate asset partitioning and reduce creditor information costs). Finally, examination of the development of the sreni in Ancient India sheds light on the importance of state structure for the growth of trade and the corporate form as well as on prospects for some kind of convergence in corporate governance.
Conclusion
India is a country of considerable historical antiquity with a long and successful history of trade. For the researcher, this makes it an enviable environment in which to study the development of business organizations. The analysis in this paper suggests that Ancient India had many different forms of business organization including the sreni. <b>Moreover, the sreni can be dated from a period much older than many would expect for the development of the corporate form â from at least 800 B.C. and perhaps even earlier. This predates, by centuries, the earliest Roman proto-corporations. Further, the sreni was also in continuing and expanding use until 1000 A.D. </b>and was utilized for many different kinds of purposes including business, municipal, social and religious activities. The sreni was clearly one of the most important institutions of Ancient India. When we examine the details of its formation, governance and regulation we find that its development corresponds well to more modern theories about the development of the corporate form. In particular, the sreni grew as trade expanded and as the supply of the monitoring methodologies needed for its development arose. Moreover, when the features of the sreni are compared to those of more modern Anglo-American corporations we find a significant amount of similarity. The members of the sreni faced many similar concerns to those we face today and they found quite similar ways of addressing those concerns. However, when we examine sreni development more closely we find a number of interesting results. The sreni grew the fastest in the state structure where there was an intermediate level of centralization and considerable deference to the sreni in managing its internal affairs. Although trade grew under other structures too, it was the relatively less centralized Gupta Empire that saw the greatest advances in trade. Of course, other factors also influenced the development of trade in Ancient India, but these results are interesting nonetheless. Moreover, the development of the sreni provides some more fodder for the debate about convergence or path dependence in corporate governance. Overall the ability of the sreni to survive and develop in a predictable fashion through so many centuries and such differing environments in Ancient India attests to its resilience and adaptability. Moreover, the Ancient Indian sreni forces us to evise our conceptions of when corporations developed to a much earlier time period. Indeed, much can be learned about the corporation from the Ancient Indian sreni.
http://papers.ssrn.com/sol3/papers.cfm?abs...4#PaperDownload
Email address for VIKRAMADITYA S. KHANNA
University of Michigan at Ann Arbor - Law School <!--QuoteEnd--><!--QuoteEEnd-->