oa Agentschap Overzee

Agents overseas. The principal-agent problem in early modern Dutch chartered companies

Could early modern chartered companies effectively ensure that their agents overseas were working in the best interests of the firm rather than in their own personal interests? This principal-agent problem has been the topic of a number of important studies in early modern economic history. This article contributes to the debate by elaborating on two case-studies from the two large Dutch chartered trading companies, the East- and the West India Companies (VOC and WIC respectively). Exploration of the careers of two individuals within these companies shows that supervision – and indeed career-making – was frequently a matter of unwritten rules and codes of conduct. While formal written rules might be found lacking, control could still be exerted through patronage or family ties. But this presented the companies with other challenges as well. In studying principal-agent problems, researchers in economic history need to be aware of informal mechanisms of control as well as formal ones.