Title

Free Riding in the Monastery: Club Goods, the Cistercian Order and Agricultural Investment in Ancien Regime France

Document Type

Article

Publication Date

4-2021

Publication Title

Journal of Economic Behavior & Organization

Abstract

How can transaction costs prevent effective monitoring of members in an organization? In this paper I test for a relationship between the cost of monitoring and free riding behav- ior within a religious organization by using a historical case study: the Cistercian Order in Ancien Regime France. Individuals were required to follow strict behavioral guidelines in order to maintain membership in the monastic order. Two monitoring devices emerged to identify free-riders: (1) an annual visit by the head of a ’supervising’ monastery and (2) attendance at an annual General Chapter meeting. Using digitized maps of transportation networks in eighteenth century France, I estimate travel costs as a proxy for monitoring costs. As a proxy for free-riding behavior in a monastic order, I use the value of agricul- tural investment since monks were discouraged from engaging in market-orientated be- havior such as investment. After matching each property with its owner’s costs, I find that where monitoring costs are higher, monasteries engage in more free riding behavior. The results hold after controlling for characteristics of the monasteries, potential issues of sam- ple selection and bias from major houses.

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