Abstract
The medieval Muslim state system did not resemble that which developed in Europe. Many reasons for this have been asserted. One which has never been discussed is that the commercial and merchant classes developed alternative, exit-based, strategies to secure property rights. In such a system, first analyzed by Charles Tiebout, the development of voice-based institutions is not an efficient use of resources. Over the long run exit can be an effective strategy to bargain with monarchs over property rights as long as a trans-regional system of law, such as Islamic shariah, exists. Such a system may also reinforce a tendency to invest in mobile rather than fixed capital.
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