Generalised morality and the problem of transition to an impersonal exchange regime: A response to Platteau

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Abstract
This essay addresses the problem of transition from a personalised exchange regime (that characterises most LDCs) to the more impersonal form of exchange that marks advanced market economies. This debate has received impetus from the discussion launched by Platteau [1994] in the pages of this journal, where he seeks to clarify the social conditions that allow the market system to evolve. While the role of private and public order institutions in generating market order is recognised, this is regarded as inadequate, necessitating the invocation of ‘generalised morality’ (GM) to complete the explanation. It is argued here that GM does not need to be invoked. The article pleads for taking a closer look at the historical role of risk‐bearing institutions, especially financial institutions. Evidence from the Bangladesh rice market is adduced in support of the contention that there exist elements even within a ‘traditional’ exchange regime that can evolve into modern, impersonal forms. This is brought out by examining some regional contrasts.

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