The evolution of financial institutions in the Ottoman Empire, 1600–1914

Abstract

For most of its 600-year existence, the economic institutions and policies of the Ottoman Empire were shaped to a large degree by the priorities and interests of a central bureaucracy. The influence of landowners, merchants and moneychangers remained limited. The central bureaucracy managed to contain the many challenges it faced with pragmatism, flexibility and negotiation. This study examines long-term changes in Ottoman fiscal, monetary and financial institutions from this perspective of pragmatism, flexibility and adaptiveness. Ottoman institutions of private and public finance retained their Islamic lineage until the end of the seventeenth century. European financial institutions began to grow in influence during the eighteenth century. With the onset of the Ottoman reform movement and greater economic interaction with Europe during the nineteenth century, institutional change accelerated. Ultimately, however, Ottoman pragmatism and flexibility remained selective and was utilised for the defence of a traditional order led by the central bureaucracy. Many of the key institutions of the traditional order such as state ownership of land, urban guilds and restrictions on private capital accumulation remained intact until the nineteenth century.