Company-states such as Dutch East India Company (VOC), British East India Company (EIC), Hudson Bay Company, Royal African Company

Granted significant sovereign powers: making war and peace, policing, minting currency?

• At the time, the idea of dividing powers of the sovereign was more common — “Europeans were thoroughly familiar with rulers’ assignment of what we would now classify as sovereign privileges to merchant and aristocratic elites”
• Also innovated other governance mechanisms such as legal personhood for corporations (?), limited liability, joint stock approach — first real companies rather than just merchant partnerships for shared risk

Companies in Indo-Pacific did better than Atlantic - greater distance meant less interference

• To be effective as companies, violence had to be a means to a commercial end rather than just pursued for geopolitical reasons - and the latter occurred more often in the intensely competed Atlantic
• Company-states were effective in these arenas because they aligned incentives for distant subordinates and therefore reduced coordination/communication costs — VOC did much better than Portuguese bureaucracy Estado de India

Fell out of favour as sovereign states developed more direct ways to exert distant offshore influence

• Also decline in domestic political legitimacy

Company-states were flexible and adept at working with local rules — concepts of divided sovereignty, territorial non-exclusivity

Brief resurgence in late 1800s during “colonial scramble” for Africa - seen as a way of doing colonies cheaply - but didn’t really succeed and were wound down much more quickly than previous companies

Uniquely European - Asian empires (Ottoman, Mughal, Qing) did not develop this form of organisation