success, and in 1360 Bruges came to terms with the Hansa. This time, reflecting the parties’ more complete understanding of the range of circumstances in which the city would have to provide services, the privileges were written “in much detail as to prevent any one-sided interpretations.”23
The institution of the German Hansa was now crystallized. It was a system of institutional elements—rules, beliefs, and organizations—that linked various transactions among merchants, their towns, and foreign cities to advance exchange. The Hansa's organizational structure provided the coordination and enforcement between German merchants and their towns that were required to alter the set of self-enforcing beliefs in the relationship between each merchant and foreign cities.
Trade in Northern Europe prospered for generations under the supremacy of the Hansa. Although the trade embargo of 1360 was not the last, later trade disputes seemed to center on distributive issues, such as the provision of trade privileges. Commitment for security was no longer an issue.
It is illuminating to contrast the development of the Hansa among German towns with the rather different organization among the Italian merchants. The solid internal political and commercial organization of the Italian cities and their prominence in trade enabled them to overcome the coordination and internal enforcement problems. Collective action among the merchants from Italian cities was ensured. Because they were sufficiently large—none of the cities was a marginal player in the ports in which they traded—coordination among the cities was unnecessary.24 In contrast, the German Kontor was a local organization lacking the ability to impose its decisions on its members, who came from various German towns. The German towns were small, and before the establishment of the German Hansa, most were relatively insignificant in large trading centers like Bruges.
Interestingly, size matters here, just as it did for the Maghribis. Among the Maghribis too small a coalition would have reduced the credibility of the punishment by increasing the cost of